From a December Fortune Magazine article titled “Redefining Emerging Markets”:

Summary:

-Countries such as Brazil, India, and Korea are being labeled “advanced emerging markets” because of high national income levels or developed market infrastructures.

-These advanced emerging markets are unlikely to experience the downfall of the Dubai World debt situation. 

-There are still some skeptics of emerging markets who point to catastrophic episodes from the 80s and 90s, such as Brazil’s inflation crisis.  However these countries have learned from these episodes, and implemented structural changes to reduce risk and maintain growth. 

-Around 15% of the MSCI All Countries World Index comes from emerging markets

-Brazil and India stock market fell harder than the US markets in 2008, but rebounded higher.  Their GDP is expected to grow 3% compared to 1.5% for the US

-Economic indicators still show a strong correlation between emerging and developed markets, especially China, the main trading partner of Latin American and East Asian countries.

Comments:

-The last 5 years have been very strong for emerging markets.  According to the MSCI emerging markets index, as of November 30th the 5yr return has been 13.3%.

-Long-Term (10 years) forecasts predict that they will continue to outperform against developed economies like the US and Europe.

-All well-diversified equity portfolios should have some emerging market content.  A typical You First long-term growth portfolio will have around a 10% weighting in emerging markets. 

I’ve added a video link below to an October 18th, 2009 interview with Patricia Perez-Couttes, who discusses the opportunities in emerging markets.  She manages AGF Emerging Markets, one of the top-performing emerging markets funds and one that’s been voted top emerging market fund in Canada for three consecutive years at the Canadian Investment Awards.

Click here to view the video.