FORTY YEARS ago Antoine van Agtmael of the International Finance Corporation pitched the idea of a “Third World Equity Fund” to sceptical fund managers, and the concept of emerging markets entered global investing. The aim had been to offer diversified exposure to fast-growing countries outside the rich world. Since then emerging and developing countries have, in aggregate, gained economic and corporate clout. But the vast disparities between them makes lumping them all into a single category increasingly odd. What might a new framework for investing outside of the rich world look like?

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In the early 1980s emerging and developing countries made up about 25% of global GDP, according to the IMF. Today they account for about 40%, and more than 20% of total global market capitalisation. The market cap of…

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