The key to a healthy portfolio is diversification. Different assets, geographies and investment styles will help you maintain steady returns and weather different market environments. And one way for certain types of investors to diversify their portfolios is to invest in emerging market funds
Emerging market economies have young and growing populations that are becoming wealthier and are spending more money. “The key difference between developing and developed markets is that growth is higher in the former," says Adrian Lowcock, head of personal investing at Willis Owen. "Developed markets have been more subdued since the 2008 financial crisis.”
Emerging markets are being driven by growth in population, urbanisation and gross domestic product (GDP). Ritu Vohora, investment director at M&G Investments, says that China is expected to account for 33 per cent of the world’s economic growth in 2019, with the rest of Asia a close second with 30 per cent. This compares with just 11 per cent for the US and a mere 4 per cent for the eurozone.