Emerging market businesses have long been perceived as risky destinations for investment. But how risky, exactly? We now have better information with which to answer that question, thanks to a pair of reports published in March by the Global Emerging Markets Risk Database Consortium (GEMs), a group of 25 multilateral development banks and development finance institutions.
The statistics yield clear messages: investment risks in emerging market companies compare favourably with those experienced in other asset classes. Moreover, the portfolio diversification provided by emerging markets gives the most benefit (versus assets with similar default rates) in times of global stress.
The reports provide a robust set of statistics taken from this database that spans 30 years of lending by GEMs members.
Fidelity Emerging Markets Limited (LON:FEML) is an investment trust that aims to achieve long-term capital growth from an actively managed portfolio made up primarily of securities and financial instruments providing exposure to emerging markets companies, both listed and unlisted.
