Emerging Markets: Blurred Lines?

As I’m gearing up to launch my new fund — the Mobius Emerging Opportunities Fund — in the coming months, I find myself rethinking the definition of “emerging markets investing”. The lines that once clearly defined these markets seem to be getting increasingly blurry. Traditionally, emerging markets referred to countries going through rapid growth and industrialization, often with lower income levels and less developed capital markets. Today, many companies listed in the US and other developed markets are making a significant chunk of their revenue from emerging economies. This shift makes us question the traditional boundaries and rethink our approach.

Back in 1987, when I was hired by Sir John Templeton to manage one of the world’s first emerging markets funds, the term “emerging markets” was still a novelty to most. At the time we were entrusted with US$100 million to invest and there were only six markets where we could deploy the money. Through hard work and a deep belief in the potential of these markets, we grew that initial pot of money to over US$50 billion, with investments across 70 countries by the time I left the company in 2018.

What a difference 37 years made.

Reflecting on my early research days in Rio de Janeiro with Copacabana Beach in the background

As the world becomes more interconnected, I can’t help but wonder if the labels "emerging" and "developed" still accurately reflect the investment opportunities available today. Companies in developed markets often have substantial exposure to emerging markets and benefit from their rapid growth. By including these companies in our investment strategy, we will be able to fully capture the potential of emerging markets.

I recently spoke to Bloomberg’s David Ingles and Rebecca Sin on their podcast Tiger Money about my views on the evolving definition of EM investing and why I believe widening our investment scope would be in the best interests of investors.

Listen to the podcast here: https://bit.ly/3XFwDaG

With Tiger Money podcast co-hosts David Ingles and Rebecca Sin

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