Keep backing emerging markets

Investors are running scared of emerging markets following China's stockmarket plunge. But as Matthew Partridge explains, it's worth hanging on to your funds.

The recent plunge in the Chinese stockmarket has shown investors that emerging markets can go down as well as up. The slump in commodity prices is hitting resource-rich countries, such as Russia. Meanwhile, there are fears that an increase in US interest rates could tempt investors to bring their money back to America. So it's not surprising that the MSCI Emerging Markets index has fallen by 25% in US dollar terms since April.

But there are still solid reasons for investing in emerging markets. Taken as a whole, developing economies are growing faster than the developed world. They also have better demographics than the ageing populations of Europe, Japan and America.Finally, they are cheaper.

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Dr Matthew Partridge
Shares editor, MoneyWeek

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri