It's time to move beyond emerging market stereotypes, says investment manager Franklin Templeton in a research note. A bet on developing countries once meant buying into politically-volatile markets dependent on cyclical commodities. But today the biggest sector in the MSCI Emerging Markets index is technology. It accounts for 28% of the market.
India is also leading the new tech charge, notes Henny Sender in the Financial Times. The value of the country's e-commerce transactions is just a fraction of that of China's, but a growing middle class means rocketing demand for a wide variety of services and easier ways to pay. The country has plenty of savvy entrepreneurs, although with venture capital playing a big role, "it may still be a while before investors in public markets have a tasty menu to pick from".
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Not all emerging markets are created equal. Materials and energy businesses, once worth 30% of the MSCI index, now make up just 15.7% of it, although that number still goes as high as 27% in nations such as Brazil. Investors will increasingly need to differentiate between emerging markets.
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