In investment performance terms, the IMA Asia Pacific ex Japan sector lost investors 2.1% over the past 12 months, with the Global Emerging Markets category returning -7.7% while its fixed income equivalent lost 10% in a year.
GDP growth numbers also indicate a slowdown in the pace of growth in emerging market economies over the past 24 months (Brazil, for example, grew by just 1.5% over this time, South Africa by 2% last year) although the longer-term story is still a strong one.
Relatively, they have low levels of debt, strong demographics and are host to world-class companies that are listed in, operating in and growing in emerging markets.
What they are all going through is structural and social change, being less reliant on exports and a source for the developed world’s cheap labour.
The elections in Brazil, India, Indonesia, Turkey and South Africa – no silly acronyms, please – will give an indication of the policies that these five countries will follow as they continue to change to consumer-led economies driven by domestic consumption.
Click here to see how all this will influence emerging market investing.
