Young Jae Lee, Pictet

Young Jae Lee has spent his whole career inside one firm, which is rare in this business. He joined Pictet in 2010 and spent his first seven years as an analyst covering emerging market technology, the exact corner of the market he now argues most US investors are badly overexposed to. Pictet itself is worth a beat. It was founded in Geneva in 1805 and is still owned by its managing partners 220 years later, which shapes how the firm thinks about time horizons in a way quarterly-driven shops rarely do.

The core argument is uncomfortable if you own a standard emerging markets fund. The MSCI EM benchmark is more than 70% Korea, Taiwan, and China, and its five largest holdings are TSMC, Samsung, SK Hynix, Tencent, and Alibaba. Line that up against the top of the S&P 500 and you are holding the same technology-heavy concentration twice. Young Jae's point is blunt. Buying passive EM alongside a US portfolio doesn't diversify you, it doubles down on the bet you already have.

RISE, the fund he runs, was built to break that overlap on purpose. It only invests in emerging market countries where the working-age population is growing, which mechanically excludes Korea, Taiwan, and China and pushes the portfolio toward India, Brazil, Indonesia, Mexico, and South Africa. The thesis leans on the Solow Growth Model, the old idea that labor and capital drive long-run output. Young Jae frames demographics in these countries as structurally the same force that AI is in developed markets, the thing that actually compounds over decades rather than quarters.

The construction is a split. Roughly 60 percent is a quantitative screen he calls an invisible analyst, sorting the universe on the factors that travel well in EM. The other 40 percent is a fundamental conviction sleeve where the team leans into names they actually know. His case for doing it this way is that active management earns its keep more in emerging markets than in developed ones, where information is thinner and the index is a blunter instrument.

The number that stuck with me is this one. Historically, more than half of the total return from the MSCI EM benchmark has come from dividend yield, not price growth. That reframes the reflex to treat EM as a pure growth trade. If most of the payoff has come from what companies pay out rather than how fast they expand, then value discipline in EM is not a style box, it is where the returns have actually lived.

Whether or not you buy the demographic screen, the overlap problem is real and easy to check in your own book. If your emerging markets sleeve and your US sleeve are both top-heavy in the same handful of chip and internet names, you own less diversification than the label promises. Worth knowing before the next drawdown tells you the hard way.