It is the perennial dilemma. Does investing in emerging markets (EM) actually diversify risk, particularly if you are living in one of the leading emerging markets already? Emerging market portfolios are more readily accessible than ever: in fact, the three EM funds available in rand, Coronation (29.8% in US dollars), Old Mutual (33.3%) and Sanlam Investment Management (26.4%) have been in the top 10 of the 180 EM funds available in the international market. The popular Templeton Emerging Markets Fund, more renowned for marketing than investment performance, had a respectable year, with a 21.1% return putting it firmly in the top quartile. Feroz Basa, co-head of the Old Mutual Emerging Markets business, says EM equities still trade at a 30% discount to developed markets, and many EM currencies look oversold. There have been bumps in the road: over three years, Coronation Global Emerging Markets is still almost 3% behind the benchmark MSCI emerging markets index. It stuck its neck ou...
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