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Feature: investment options for Asia
04 June 2010
The case for investing in Asian emerging markets is clear but should investors go directly through a mutual fund or indirectly with an ETF?
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[Asia]
[mutual fund]
[ETF]
If investors have been hesitating over whether to invest in emerging markets, they are no longer. Spurred on by what one economist at Citi described as the ‘submerging’ developed markets of Europe, investors in Europe and the US are revising their preconceptions about risk in these countries and are moving their assets into global and emerging market bonds and equities.
The MSCI World Index indicates that emerging markets’ capitalisation has jumped from $500bn in 2003 to some $3.4 trillion this year, equivalent to a leap from 4% of the market to almost 13%. It is difficult to establish how much money has gone to frontier markets, but the MSCI Barra indices suggest they have a total market value of $123 billion. That may be up six-fold from 2003, but it remains just 0.5% of the $23 trillion market capitalisation of the MSCI World index.
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