Emerging markets come of age

Back in the 1990s, they were “submerging markets”. But over the past few years, developing countries’ stockmarkets have rocketed. What's the best way to gain exposure?

Back in the 1990s, they were "submerging markets". But over the past few years, developing countries' stockmarkets have rocketed. Since October 2002, the MSCI Emerging Markets Index has more than tripled, and is now just below its May record peak. The Bric nations (Brazil, Russia, India and China), which Goldman Sachs reckons will be among the top six global economies in 2050, have led the rally, climbing six-fold.

You can see why investors are excited. Emerging economies, which boast young and expanding populations, are growing much faster than their industrialised counterparts, helped by burgeoning middle classes that are spurring consumption and thus reducing dependence on exports which have jumped over the past few years, thanks to the commodities boom. The Brics in particular have bolstered their appeal by stimulating education, foreign investment and entrepreneurship, Mark Mobius of the Templeton Emerging Markets Investment Trust told Investment Trust magazine, while "developed markets are no longer superior in terms of corporate governance".

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