Emerging markets are the engines of growth for the global economy. Urbanization, rising incomes and natural resources wealth are powering the emerging world to new levels of capitalism. Emerging markets, like all investments, can have wide price fluctuations over time. This table shows the ebb and flow of emerging market countries over the past decade and illustrates the principal of mean reversion — the concept that returns eventually move back toward their mean or average. Of course, past performance does not guarantee future results. The performance of emerging countries is determined by several factors including the strength of the currency, inflation rate, liquidity of the market and the government policies in place to promote economic growth, to name a few. This is why we believe professional, active managers who understand the factors affecting market performance and the global trends impacting them are essential for globally-minded portfolios.
The Periodic Table of Emerging Markets
See the interactive infographic here.
Infographic source: U.S. Global Invetors