The Chronic Investor Blog has a post noting there is still a place for emerging markets in the portfolios of private investors and not just because they seem to perform out of synch with developed markets – making them a useful diversifier. However, the blog cautions that investors cannot rely on the blanket assumption that emerging markets are due to “converge” with richer peers. Instead, the blog argues that investors need to work out which economies look better placed to perform (e.g. Poland) and remain alive to a changing outlook (e.g. will Modi transform India?). It was also noted:
Taking a longer-term view, it is important to recognise that emerging markets are not pre-destined to emerge into the developed world. Those that do – such as South Korea – are the exception, not the rule. It is sobering to recall that conversations about emerging markets in the 1970s would likely have included references to countries like Zimbabwe, Venezuela and Pakistan. China was the basket case back then.
The post concluded by saying:
Most private investors are probably better off outsourcing the job to a fund manager, who can choose not only the more dynamic countries, but also the more dynamic sectors of what are often immature stock markets, heavy on former state-owned enterprises, resource companies and banks. The average emerging-market fund has beaten the MSCI index over the past three difficult years. This is one area where the professionals easily justify their fees.
To read the whole article, Leave emerging markets to the pros, go to the Chronic Investor Blog on Investors Chronicle.
- Lessons From When the USA was an Emerging Market (WSJ)
- Rapid Aging in Emerging Markets will Impact Consumer Spending (AllianceBernstein)
- Emerging Market Stocks Face Prospectus Scrutiny (Canadian Securities Law)
- Three Reasons Why Investors Should Buy Frontier Market Stocks (The BlackRock Blog)
- Unlike Emerging Markets, Frontier Markets Are a Less Volatile Haven (FT)
- Emerging Market Private Equity Beats Listed Stocks (Asian Investor)
- Frontier Markets: Attractive Valuations with Limited Correlation (Mobius Blog)
- Job Insecurity Hits the Middle Class / Older Workers in Emerging Markets (AllianceBernstein)
- Seven Things to Consider Before Investing in Emerging Markets (AllianceBernstein)
- Investor Sentiment Survey: What Emerging Market Investors Think (Franklin Templeton)
- Sovereign Wealth Funds Increase Investments in Emerging Markets (SCMP)
- Indices for Measuring Emerging Market Political Instability (Enterprising Investor)
- Emerging Markets: Where People Actually Use Google+ (GlobalWebIndex Blog)
- Emerging Markets’ Foreign Exchange Reserves Have Dipped (Mobius Blog)
- 8 of 10 Fastest Growing Markets are Frontier Markets (Mobius Blog)