Impact investing in emerging markets is seldom considered as part of an investment strategy. Indeed, the psychological bias of risk aversion, as presented by Daniel Kahneman and Amos Tversky, makes us reluctant to invest in asset classes with high risk/reward ratios, which is often the case with emerging markets. This reluctance is exacerbated by both negative media coverage of emerging markets and domestic biases that reduce our appetite to invest in these markets. However, to fully benefit from global growth, investors should include emerging markets in their strategy, as these markets are expected to support 70% of future global growth.
