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Emerging markets is where to be if you want high returns from equity investments - Alldamoney

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Emerging markets is where to be if you want high returns from equity investments


investing in emerging markets

Investing in emerging economies brings High returns, but also comes with greater uncertainty and currency volatility, therefore most Investors often think of emerging markets as a risky investment.
Data from Bloomberg show that the top 10 stock indexes that gave global investors the greatest returns in 2016 were all emerging or frontier markets, and over the span of 20 years, nine out of 10 best-performing equity gauges have been from developing economies.

At the start of the year, these economies account for nine out of top 10 dollar returns and seven of the 10 best volatility-adjusted gains. They will keep benefiting from high earnings expectations and expanding growth differentials with rich nations.
Reiterating the findings Julian Mayo, who helps oversee $2 billion as co-chief investment officer at Charlemagne Capital Ltd. in London said “What the data shows is that our preconceptions are often wrong,” and while “The long-standing thought is that emerging markets are riskier and less resilient than developed markets. This data demonstrates that it isn’t always the case.”

This winning run is showing Signs to continue as developing economies grow and develop their financial markets the more.
Globally, Brazil was the best equity market in dollar terms In 2016, with its benchmark index gaining 69 percent, while Kazakhstan came out on top in term of volatility-adjusted returns. Pakistan got the second spot. The country will formally upgrade to an emerging market from a frontier nation at MSCI Inc. later in the year. These markets, including Peru, Russia, Morocco and Bulgaria, featured in the lists.
The Year 1998 was the last time rich nations dominated the list of equity gainers when emerging markets were shaken by the Russian debt default and the Asian currency crisis.
Greece was first that year market in dollar terms, but by 2013 the country was downgraded to an emerging market status by MSCI.
Developing-nation stock valuations remain attractive and should lure investors this year after the out performance made in 2016 said Mayo.
At 12.1 the MSCI Emerging Markets Index traded times the projected earnings of its members, which is 26 percent lower than the price-earnings ratio for the MSCI World Index.

However, what the data show is the most performing stock markets in emerging nations, not that every emerging nation is a good performer. The data also revealed that the list of worst loss makers is dominated by the developing world.

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