Why viewing GEMs as a single asset class is a 'mistake'

Considering emerging markets as a single asset class is a mistake and investors must move towards a more granular analysis of risks and opportunities, just as they do with developed markets, explains John Ventre (pictured), head of multi-manager at Old Mutual Global Investors.

The past 20 years have seen emerging markets lurch from the currency crises of the 1990s to a rampant bull market in the 2000s, whereas more recent conditions have been less directional. Still, there has been one constant throughout that period - volatility. Recently, relative to developed markets, that volatility has begun to fade. The 1990s saw emerging markets nearly 70% more volatile than developed ones, and the 2000s saw volatility at a 60% premium. This decade, so far, sees realised volatility at a little more than a 30% premium. The nature of emerging markets would appear to ...