The Emerging Markets Re-Emerge: Funds Get Hot Again

by John Markese

The Emerging Markets Re Emerge: Funds Get Hot Again Splash image

They have taken their time. But the emerging markets have finally re-emerged, reclaiming their status as true growth investments.

As an investor, it’s hard not to conjure up political and economic upheaval, not to mention devaluations and defaults, when contemplating emerging markets. While emerging markets scream risk, let’s put aside the images of rioting in the streets of Buenos Aires for a moment and look at some numbers. For the last five years, arguably one of the worst half decades in terms of financial turmoil in recent memory:

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  • Emerging stock funds as a class generated compound annual returns of 9.1% with a total risk index of 1.39. That compares with a risk index of 1.00 for the average mutual fund.

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