Although the global downturn took its toll on equities across the globe, emerging markets continued to record growth throughout 2008. It is predicted that it will be the emerging economies to lead the world out of the downturn in 2010.

This should not come as a big surprise, after all, in 2007 the growth rate of emerging market economies was 8.3% compared to only 2.7% in advanced economies. In addition, in the mid 1990s, emerging economies contributed just 4% of world growth, now the combined market contribution is over 50% and is predicted to rise.

India is currently one of the top countries to be contributing most into global growth. With the strong performance in the Indian equity markets during the downturn, the average daily turnover has grown to over 5 times the 2002 daily figure of $750 million to $3.6 billion. As a result the number of large-cap stocks available to domestic and foreign investors has soared.

Brazil is the fifth largest country in the world with 12% of the world’s fresh water and huge amounts of natural resources. It is a massive producer of agricultural crops and livestock and meets most of the population's energy requirements using hydropower. In addition, the majority of the country’s cars run on locally produced ethanol which is derived from sugar cane. Even during the downturn Brazil did not endure the business and consumer distress to affect most of the world.

Even though emerging markets are deemed more volatile, the past 10 years of portfolio investment exposure has seen a similar level of volatility as developed markets, but has provided far better returns in that time. In the past decade the MSCI Emerging Markets Index has massively outperformed its developed market counterpart.

How much money you should invest within the emerging markets depends entirely on your investment objectives and your appetite for investment risk. If you would like more information on investing in emerging market funds, please contact us.

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