Franklin Templeton’s Mark Mobius recently shared with FE Trustnet what he thinks are the biggest risks facing emerging market funds:
“If there is a dramatic rise in interest rates globally that will affect all markets, including emerging markets.”
“What we have seen previously is that emerging markets sometimes overreacted on the upside and the downside. That is probably not going to happen so much in the future because emerging markets have got a lot bigger so you are not going to have that kind of volatility.”
“However, volatility is with us. Wherever you go volatility is increasing so we have to be ready for that and realise that this happens but it won’t last – that’s the beauty of markets generally.”
“The bear markets are very sudden, they are very frightening but the recovery comes relatively quickly and if you are a dollar cost averaging investor you will probably do very well – particularly if you are willing to do so when things look very bad and people are scared – that’s when you’re going find opportunities.”
Mobius also commented that frontier markets (e.g. Africa) and small caps in emerging markets are the most interesting areas right now.
To read the whole article, Mobius: The big risk to your emerging markets fund, go to the website of FE Trustnet.
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