Emerging Market Equities Gain Traction as Alpha Frontier Amid Structural Shifts
Emerging market equities are shedding their reputation as volatile, high-risk assets as structural reforms and fiscal discipline narrow the volatility gap with developed markets. The asset class now accounts for over 10% of global equity markets, presenting a compelling case for portfolio diversification.
Long-term trends show EM equities demonstrating resilience, with improving corporate governance and economic fundamentals. This convergence challenges traditional risk models that have kept many investors underweight in EM relative to its 39% share of global GDP.