Are emerging markets still a good investment?

Are emerging markets still a good investment?
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GRI Debate: Should investors continue to invest heavily in emerging economies?

The last decade saw an investment boom in emerging economies, with the much-heralded era of the BRICS. But as political instability grows in these regions, do they continue to be good investments? In this debate, GRI asked two of its top analysts about the future of emerging economies.

The case for why the era of emerging markets is over

Eric Simmons presents why the intensification of political risk and the return of stability in developed markets, with the Fed eventually raising rates, spells trouble for emerging economies.

2013_Brazilian_protests“As political risks continue to increase in emerging markets countries, we will see a decrease in both the number of supportive monetary policies undertaken by the G20 economies as well as the overall level of geopolitical uncertainty that currently exists in the developed world. The resulting impact of these forces will be the elimination of the financial environment that has been extremely conducive to emerging market investing.”

Read the full article here.

 

The case for why emerging markets continue to be a good investment

Sagar Sambrani presents why, due to higher returns in emerging economies and the negative yielding and continued uncertainty in the developed world, investors will continue to take risks.

Piketty-Emerging Markets“For investors looking to generate alpha, emerging markets have proved to be a key component of their portfolio, owing to the impressive relative yields compared to developed markets & opportunities for hedging through diversification across EM. Understanding of EM risks has improved over the years with globalization and investors are now better poised to navigate these waters and extract the yield they seek.”

Read the full article here.

 

GRI Debates provide critical insight into the world’s most challenging political risk topics. Through well-balanced opinion based articles, GRI Debates offer a forum for deeper discussion into how major political decisions and security challenges affect markets, investment, and economic growth across the globe.

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