Are Emerging Markets too Risky for You?

Jul 1, 1993

Everyone knows that investing in emerging markets is risky. That's only true, however, if you put a large proportion of your money in emerging markets. In the paper entitled "Emerging Markets: A Quantitative Perspective," we show that investment in a well-diversified emerging markets portfolio of up to 50% would have reduced the overall volatility of a global investor's portfolio over the past five years. In this article we propose a methodology to further reduce the risk of a global portfolio--through increased investments in emerging markets