Why passive pays in emerging markets

Many investors still prefer active funds when investing in emerging markets. But that, says Sarah Moore, may not be the best option.

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Many investors who use low-cost passive funds for investing in developed markets still prefer actively managed funds when investing in emerging markets. They assume that because emerging markets are seen as more unstable, risky and inefficient, active managers will have more opportunity to beat the market through in-depth research and skillful stockpicking. But the evidence doesn't back this up, as James Connington points out in The Daily Telegraph. The majority of emerging-market funds with a ten-year record did no better than a low-cost tracker fund over that period.

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Sarah is MoneyWeek's investment editor. She graduated from the University of Southampton with a BA in English and History, before going on to complete a graduate diploma in law at the College of Law in Guildford. She joined MoneyWeek in 2014 and writes on funds, personal finance, pensions and property.