Emerging Market Mutual Funds: Key Factors for Recession-Proof Growth
Investing in emerging markets (EM) presents a compelling opportunity to tap into economies expected to dominate global growth in the coming decades. Yet, the allure of outsized returns comes with heightened exposure to political, regulatory, and liquidity risks. Success in this space demands specialized due diligence that transcends raw performance metrics, focusing instead on operational resilience and risk-adjusted returns.
Critical to this process is evaluating fund managers' expertise and their ability to navigate volatile market cycles. Metrics like the Sortino Ratio and Alpha provide insight into whether returns stem from skill or mere risk-taking. Equally important are strategies to mitigate region-specific threats such as financial contagion and currency controls.
