Equities outperform on back of strong economic indicators

Against all the odds, emerging mar-ket equities outperformed most other asset classes last year, producing very strong returns despite the tradi-tionally negative backdrop of rising US interest rates and a slowdown in US economic growth. The MSCI Emerging Markets index is up more than 23% in local currency terms to 1 December 2006, compared to a 12% return for the MSCI World index. A major reason for this strength has been the fact that economic indi-cators have remained strong, with robust third-quarter GDP growth now coming through from major markets in all emerging regions. For ex...