Why EM acronyms are no longer valid

EMERGING MARKET

Jan Dehn, head of research at Ashmore Investment Management, explains why oversimplified and unhelpful emerging market acronyms have resulted in the region being ‘dumbed down' as an investment prospect.

The arrival of the global crisis in 2008 brought to developed financial markets a brand new illness called ‘dumbing down disease’ (DDD). Spreading like a plague over the past six years, its primary symptom is a tendency for markets to simplify every conceivable investment opportunity, no matter how complex, into just two types: namely, those that do well when people are feeling bullish, and those that do well when people are feeling miserable. In common parlance, this symptom has come to be known as ‘risk on/risk off’. The world is obviously far more complex than the simple binary con...