Potential from emerging sectors

Viewpoint

Over the medium to long term, the pace of economic growth in emerging markets is likely to be faster...

Over the medium to long term, the pace of economic growth in emerging markets is likely to be faster than in the west, and companies in these markets stand a greater chance of beating earnings expectations. But with this potential for generating higher returns comes the prospect of increased portfolio volatility. Emerging markets are less liquid than major equity markets and more likely to be subject to political and economic instability. This has been evident recently in Russia, where political interference in the future of oil giant Yukos severely dented confidence in the market, in spite...