Global Integration in Asset Allocation Strategy

As a portfolio manager for a global investment firm, you are tasked with developing an optimal asset allocation strategy for a high-net-worth client with a significant emphasis on global diversification. The client has expressed an interest in enhancing their portfolio's exposure to emerging markets, but they are concerned about the associated risks.

Consider the following variables:

• The client has a long-term investment horizon of 10+ years.
• Current market conditions indicate potential geopolitical risks in certain emerging markets.
• International economic indicators suggest varied growth rates across different regions.

In your response, discuss the implications of global integration in asset allocation, the role of diversification in managing risk, and specific strategies to enhance the client’s exposure to emerging markets while addressing their concerns. Support your recommendations with relevant theories and evidence from contemporary literature.