Writing for Portfolio Institutional, one of Natixis’ chief researchers points to the fundamental shift in emerging market investment

Traditionally, emerging markets offered investors higher risk and higher reward, relative to investing into “developed” markets. According to Adil Reghai – who heads Natixis’ team of 30-plus quantitative researchers – this proposition has now fundamentally shifted. Over the past 12 months volatility risk and liquidity risk in emerging markets have converged with the same risks investing in the US and Europe. Meanwhile the proliferation of derivative and other hedging instruments tied to underlying developing markets securities, and the significant expansion of company and country coverage for financial analysts, have significantly reduced the risk of investing into emerging markets.

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