Hunting for value in emerging-market funds

Many emerging-market stocks look cheap – but few funds are betting on them while the risks remain high

Jair Bolsonaro, President of Brazil © Andressa Anholete/Getty Images
Brazil’s president, Jair Bolsonaro: investors are shunning the country
(Image credit: Jair Bolsonaro, President of Brazil © Andressa Anholete/Getty Images)

One of the headaches of buying out-of-favour assets is that the more out of favour they become, the harder it gets to invest in them. Take cheap emerging market shares. Ever since the rally began in April, emerging markets have polarised between a small number of hot stocks, mostly in the tech sector, and a large pack of also-rans. The same is true in developed markets, of course; Alphabet, Apple, Amazon, Facebook, Microsoft and their peers have soared ahead since April. Yet the gulf in emerging markets is even wider.

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Cris Sholto Heaton

Cris Sholto Heaton is an investment analyst and writer who has been contributing to MoneyWeek since 2006 and was managing editor of the magazine between 2016 and 2018. He is especially interested in international investing, believing many investors still focus too much on their home markets and that it pays to take advantage of all the opportunities the world offers. He often writes about Asian equities, international income and global asset allocation.

Cris began his career in financial services consultancy at PwC and Lane Clark & Peacock, before an abrupt change of direction into oil, gas and energy at Petroleum Economist and Platts and subsequently into investment research and writing. In addition to his articles for MoneyWeek, he also works with a number of asset managers, consultancies and financial information providers.

He holds the Chartered Financial Analyst designation and the Investment Management Certificate, as well as degrees in finance and mathematics. He has also studied acting, film-making and photography, and strongly suspects that an awareness of what makes a compelling story is just as important for understanding markets as any amount of qualifications.