LAPF Investments : Should LGPS funds invest in emerging markets?
Emerging markets (EM) currently look attractive to many investors due to their pricing and increasingly stable fundamentals. However, investing in EM assets means investors take on currency risk which is typically more volatile than investing in development market assets. Hedging is one approach to dealing with this risk, though Andrew Bloomfield, Associate Director of Research at Record Currency Management, poses an alternative called EM diversification which optimises rather than removes EM currency risk.
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