The emerging markets refer to a number of countries that are on their way to becoming more developed economies. These markets are characterised by rapid economic growth, developing financial markets and a growing and increasingly affluent middle class. The diversification of industry and services is progressing well in these countries, while trade with other economies is increasing.
The emerging markets include, for example, China, India and Brazil, as well as several countries in Southeast Asia, Eastern Europe and Latin America. These regions account for a significant portion of global economic growth and offer diverse prospects for global economic development.
The emerging markets as an investment
When you invest in the emerging markets, you can aim for higher returns due to the rapid economic growth, expanding middle class and industrialisation in these regions. You also gain valuable diversification for your portfolio, as the emerging markets often move at a different pace than developed markets. However, be prepared for stronger price volatility, political uncertainty, unexpected regulatory changes and currency exchange rate fluctuations.
The emerging markets may be suitable for you if you are a long-term investor and can tolerate higher risk. However, remember to balance your portfolio and ensure that your investments are appropriately distributed across other regions as well.