‘Emerging Markets’ Funds Rely on Globe-Trotters : Finance: If you yearn to see the world, you don’t have to join the Navy. Become an investment specialist instead.

NEW YORK —  Got a yearning to see the world? Then become a diplomat, a sea captain--or the portfolio manager of an “emerging markets” mutual fund.

Just ask Michael Hoffman, who at age 31 runs the new Robertson Stephens Emerging Markets Fund from its headquarters in San Francisco or, more often, either in or traveling to South America, Asia, Eastern Europe or Africa.

That makes him a member of a small but growing breed of globe-trotting investment specialists, products of the surging popularity of international mutual funds. No longer is money management a 9-to-5 desk job.

“I’d say about a week a month is when I expect to see my office,” Hoffman said on a recent visit to New York.

Many international investment managers spend a lot of time checking out companies and economic conditions in foreign financial capitals such as Tokyo, London and Paris.

But an emerging markets specialist like Hoffman usually skips those prosaic locations in favor of places like Thailand, Turkey, Poland and Peru.

He acknowledges that his profession probably is best suited to a young person without a spouse and children. But Hoffman also extols the benefits of such a life, which he discovered while at the University of South Carolina getting a graduate degree in international business, and later as emerging markets portfolio manager at Cigna International Investment Advisers.

“Once I got a taste for the international travel, I haven’t looked back since,” he said. “You encounter many different cultures, different customs, different standards. I personally find it all fascinating.”

The idea of international investing is simply to expand your horizons beyond opportunities in the United States, which some view as a mature economy.

Emerging markets attract investors looking for fast growth rates--perhaps double the pace in the developed world.

But the risks can run high as well. Investors would be putting their money in businesses operating in environments where the political climate may be unstable, the accounting standards variable and the formal markets for trading stocks rudimentary.

After climbing 60%, 70% or more in some cases last year, emerging markets funds on average have suffered a 10% setback so far in 1994. Hoffman’s fund is too new to have a record.

“I very strongly believe in the long-term potential of these markets,” Hoffman said. “But you have to be broadly diversified across countries. Emerging markets are extremely volatile.

“The discovery phase of the emerging markets is over,” he added. “Everybody knows what emerging markets are now. You can’t make money now simply by being early.”

Faced with this increasing sophistication, Hoffman’s fund, unlike its typical competitor, uses a strategy known as short-selling, which is based on an assumption that a stock will fall in price.

Thus, if he believes a market or company is overpriced, he tries to profit by borrowing and selling shares of the stock in question, or perhaps those of a publicly traded country fund. He hopes to repurchase the shares at a lower price, following the dictum “buy low and sell high” in reverse order.

Hoffman also aims to keep a part of the fund’s assets in pre-emerging markets, where capitalism itself may be just creeping into the picture.

Without the technology and communications advances of just the past few years, a portfolio manager making frequent 12-, 15- or 20-hour flights to offbeat parts of the world would have trouble keeping in touch with home base and the markets.

But Hoffman says portable computers, high-tech market information services, fax machines and similar gear help him stay connected.

On a typical flight, he says, he burrows into a mountain of research reports, newspapers and magazines and administrative paperwork. “I get more work done on the plane than when I’m in the office,” he said.

Once at his remote destinations, he divides his time roughly in thirds--meeting with government officials, conferring with economists, consultants and local journalists, and visiting companies that are in or are candidates for the fund’s portfolio.

“Sometimes you have to make sure the factories actually do exist,” he said.