The prevailing wisdom is that the market for equities in emerging markets is less efficient than in developed markets. Unfortunately, the evidence doesn’t support this hypothesis. For instance, the S&P Indices Versus Active (SPIVA) scorecard showed that over the 10-year period ending June 2015, 92% of actively managed emerging market funds underperformed their benchmark, the S&P/IFCI Composite Index.
On an equal-weighted basis, the full universe of actively managed funds returned 7.2% over that period and underperformed the benchmark by 1.9 percentage points. On an asset-weighted basis, the underperformance was 1.2 percentage points.
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