Some investors pass on allocating equity funds to one of the highest growth regions, emerging markets. They are fearful of accounting manipulation or are intimidated by the daunting task of interpreting financial statements that are difficult to reconcile with what they know of their developed market equivalents. These concerns are partially a throwback to the questionable accuracy of financial statements in years past—although even today, it is not wise to take all reported numbers at face value. We find that even when using the best ‘off-the-shelf’ emerging markets financial data, much work still needs to be done if one intends to use those data to build robust emerging markets portfolios.
Rayliant Global Advisors
