Low valuations, diversity and reduced political risk helped emerging markets outperform their more developed peers in 2002 and should continue to provide a boost over the forthcoming year
Emerging stock markets out-performed those of the developed world during 2002, helped by falling interest rates in the US and Europe, which increased the relative attractiveness of riskier asset classes. The MSCI Emerging Market Index fell 20.2%, compared to a drop of 31.7% for the MSCI World Index. This outperformance continued in January 2003, despite a widespread retreat by investors into quality safe havens such as US Treasuries as the 'war risk' premium increased. We believe the factors that have supported this outperformance will persist throughout 2003. World-class companies in...
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