Active Underperforms In EM, Too

A recent article in The Wall Street Journal proposed that investors consider five factors before investing in emerging markets. One of these five factors was the flexibility of active funds. The author, Michael Pollock, writes: “Managers of active funds can make distinctions among that huge range of stocks that an index-tracking fund doesn’t make.”

The article quotes Jan van Eck, chief executive of Van Eck Global, who believes there are some compelling arguments for active management in an emerging markets fund. According to Van Eck, whose firm manages the Van Eck Emerging Markets Fund (GBFAX), with each of the countries in the category at a different point in its development cycle, “you absolutely don’t want to have exposure to all countries at all times.”

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