Emerging Markets Conundrum

May 20 2010.

Research Affiliates examines the underperformance of traditional emerging market equity indexes relative to the spectacular growth of emerging economies from 1994 to 2009, concluding, "the gap between emerging market economic and stock market performance is a [i]direct result of the return drag from capitalization weighting[/i]." 

Here is more solid evidence that big cap's in emerging markets are dragging on overall performance of many such markets.  Members can dowload the full report at this link, then look for "Emerging Markets Conundrum."  See here more evidence on how emergingstock market performance is often masked by lagging and yet more volatile large capitalized stocks.

Click on this link and look for the report called  "Emerging Markets Conundrum"

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