Report: Not All Emerging Markets Are Created Equal
In the last decade, while emerging markets delivered outsized returns on bonds and equities, they also sparked convergence with developed markets. This year's CREATE-Research report, Not All Emerging Markets Are Created Equal, focuses on expected market drivers for the remainder of this decade and how investors will respond to those drivers.
In a recent blog post, Dr. Amin Rajan, Chief Executive-CREATE-Research, cited four key findings:
- Emerging and developed economies will continue to converge.
- The emerging market story is being rewritten as investors become more discerning.
- The gravitational pull in key asset classes guides investors West.
- This could be the age of stock pickers as catchy acronyms such as BRICS and MINT become irrelevant.
Sponsored by the Principal Financial Group®, the 2014 report's survey respondents represent nearly $30 trillion of invested assets, involving 704 pension plans, sovereign wealth funds, pension consultants, asset managers, and fund distributors in 30 jurisdictions worldwide.
International and global investing involves greater risks such as currency fluctuations, political/social instability and differing accounting standards. Risk is magnified in emerging markets, which may lack established legal, political, business or social structures to support securities markets.
Asset allocation and diversification do not ensure a profit or protect against a loss. Fixed-income investments are subject to interest rate risk; as interest rates rise their value will decline.
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