opportunities for investors. These markets exhibit high expected returns as well as high volatility. Importantly, the low … correlations with developed countries' equity markets significantly reduces the unconditional portfolio risk of a world investor …-section of average returns in emerging countries. An analysis of the predictability of the returns reveals that emerging market …

opportunities for investors. These markets exhibit high expected returns as well as high volatility. Importantly, the low … correlations with developed countries' equity markets significantly reduces the unconditional portfolio risk of a world investor …-section of average returns in emerging countries. An analysis of the predictability of the returns reveals that emerging market …

We explore the different factors that drive expected returns in world markets. Our research offers two innovations …. First, the introduction of the Euro currency unit greatly reduces the complexity of including foreign exchange risk in asset … currency risk factors. Second, when combining the currency factors with a group of economic factors, we measure the incremental …