Emerging vs. developed markets

Emerging markets represent half of the global economy. Volatility, the quality of corporate management and government policies are comparable with developed markets. Clear differences between emerging and developed markets largely disappeared.

The economies of emerging markets are growing rapidly. Gross domestic product (GDP) in China in Purchasing Power Parity is greater than the GDP of Japan. India's economy is in this indicator higher than Germany and Russia is bigger than the UK. Together the BRICs (Brazil, Russia, India, China) economies are just as big as Western Europe. Emerging BRIC countries has the the same share of the global economy as the U.S..

Liquidity in financial markets in emerging countries has dramatically increased in the past 10 years. In 2009, China securities traded volume more has been bigger than on NYSE (New York Stock Exchange), in Korea more than in France, in India more than in Canada.

Also volatility in emerging markets is very close to the developed markets. As a example can be year 2008 when volatility was more or less the same for both groups.

Shares in emerging markets in the past 10 years substantially exceeded the performance of stocks in developed markets. The decline, which began 2 years ago hit the developed and developing countries in the same way. While the investor in developed markets (MSCI World Index - MXWO) are after 10 hard years hardly on initial levels. Investing in shares in emerging markets for the same period doubled (MSCI Emerging Markets Index - MXEF).