Questioning the EM growth story

EMERGING MARKETS

After three years of underperformance, is the long-term emerging market growth story still compelling for investors? Annabelle Williams reports.

Emerging market equities have been a thorn in the side of investors for the last few years. The MSCI EM TR index has returned a dismal -2.4% over three years to 17 October, compared to a 47.04% return from the S&P 500 and a 24% return from the FTSE 100 over the same period. The investment case for emerging markets tends to rest on demographic trends such as increasing consumption and urbanisation, alongside the large and young populations many emerging nations can boast. Investors in these markets want to be exposed to the opportunities these changes can bring. But emerging markets ar...