Emerging market opportunities

22 min Read Published: 05 Feb 2021

Emerging market equities have been shunned by many investors over the last decade, perhaps understandably so. Between January 2010 and January 2020 the S&P 500 rose by 308% while the MSCI Emerging Market index rose just 74.93%. It even underperformed the FSTE 100 which rose 103.98% (i.e doubled in value).

But while it may have passed many investors by, those of you who have been following my weekly newsletters and my £50,000 portfolio reviews will be well aware that developed markets underperformed emerging markets in 2020. The first chart below shows the performance of key world stock indices during the initial stock market slump following the initial Covid-19 outbreak.

 

The second chart shows the performance from the start of 2020 to date:

Not investing in emerging market equities would have been a missed opportunity, especially since the start of December 2020 (as shown below), which happened to be when I introduced a significant exposure to emerging market equities into my own portfolio.

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