Emerging markets: less risk, more reward

The huge outperformance of American indices since the global financial crisis means the US has become an even larger component of the global stock market. Consequently, your global investment portfolio may be less diversified than you think.

One solution, suggests AQR Capital Management in a recent report, is to overweight emerging markets. The correlation between emerging and developed markets has fallen over the past 25 years, meaning emerging markets now offer greater diversification benefits.

Diversification aside, emerging markets are cheap. AQR estimates emerging markets should outperform developed markets by three percentage points annually in coming years – a “generationally wide” premium and one of the highest levels in the past 25 years.

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.

Click to view all articles for the EPIC:
Or click to view the full company profile:
Facebook
X
LinkedIn
Fidelity Emerging Markets

More articles like this

Fidelity Emerging Markets

Indian market optimism surges

Indian stocks poised for growth despite challenges, with global trends and potential rate cuts boosting investor confidence.

Fidelity Emerging Markets

Positive momentum for Emerging Markets as US dollar weakens

Emerging market currencies strengthened as the US dollar lost ground following President-elect Donald Trump’s decision to nominate Scott Bessent, a Wall Street veteran, as Treasury Secretary. The announcement sparked optimism for market-friendly policies, reducing concerns over

Fidelity Emerging Markets

Emerging Markets shaping global economic growth

Emerging markets are expected to drive nearly two-thirds of global economic growth by 2035, marking a significant shift in the world economy. According to S&P Global’s latest Look Forward research study, these markets will play a

Fidelity Emerging Markets

Emerging Markets: Is a recovery on the horizon?

Take yourself back to the aftermath of the most severe financial crisis since the Great Depression, 15 years ago. The financial world, crippled by a US-led credit and housing bubble, was being revived in part by

Fidelity Emerging Markets

Is now the right time to invest in Emerging Markets?

A growing interest in emerging markets has often attracted investors due to their potential for rapid growth and diversification. However, these markets have also brought challenges, including volatility and structural risks, which have resulted in significant

Fidelity Emerging Markets

Emerging markets gain amid resilient US jobs data

Emerging market stocks saw gains on Monday, tracking the movement of global equities. The MSCI emerging market stock index rose by 0.4% as of 0815 GMT, buoyed by significant advances in Hong Kong and Taiwan, which

Fidelity Emerging Markets

Should investors reconsider Emerging Markets?

Emerging markets have faced significant criticism over the past decade. A stronger dollar, declining commodity prices, and sluggish corporate income growth were key factors driving this scepticism. As a result, investments in these markets have delivered

Fidelity Emerging Markets

Emerging Markets gain momentum as US rate cuts approach

Emerging markets (EM) are gaining attention from capital markets as the likelihood of U.S. Federal Reserve rate cuts grows. With rate cuts on the horizon, traders are seeing new opportunities in the EM space, where profitable

Fidelity Emerging Markets

Emerging market assets rally as US dollar dives

The optimism surrounding the upcoming Federal Reserve decision has sparked a surge in emerging market assets, with investors increasingly hopeful of a significant interest rate cut. The anticipation of a 50 basis point reduction has driven