Emerging beat developed markets in 2001
GLOBAL – Global emerging markets outperformed their developed market counterparts as a whole last year and only declined marginally in dollar terms, despite caution among emerging market fund managers.
Standard & Poor’s, publisher of the data, says this is a reversal of trends as emerging markets have generally exaggerated the market movements of the developed world in the past.
According to S&P, this is because investors are still cautious about earnings prospects in developed markets whilst valuations for companies among emerging economies have proved more resilient.
But this hasn’t stopped fund managers investing in emerging markets showing caution. S&P says there has become evident as there is a lower tracking error against the major emerging market indices. The error, normally around 8%, fell to 5% last year.
Asia has performed better than other regions in attracting investors, says S&P. Asian exposure has increased from 47% in 2000 to 52% last year. But S&P points out that Asia has greater weightings in global indices and this may explain its continuing dominance. Latin America dropped slightly to 23% whilst EEMA was steady at 21%.