investing in emerging markets?

eastmidsaver

hi there,  so i am wondering what you're thoughts are investing in Emerging Markets?
i have recently put in £750 into an EM fund,  at one point it was about £75 up,  now it is about £30 down  .  This tells me it is quite a volatile sector?
By the way, I try not to look at it too much as I know it's a longer term thing,   but I when I log in to top up my HL account I can't avoid it. 
But my gut is that over a couple years, i think it should do reasonably well.
Be great to hear your thoughts on the sector.

masonic

It is generally better to assess an investment prior to investing in it, rather than throw some money in and then see what happens. Yes, EM is generally a more volatile sector than most developed markets. "Over a couple of years" is not a thought that should enter your mind when making a long term investment such as this. You should be thinking "over a couple of decades". Over a couple of decades, the sector should do quite well. Your particular fund may do better or worse than the sector average.

El_Torro

My thought is that the multi asset funds I invest in have some of their allocation in emerging markets and that’s all the exposure I need. 

I can certainly see the logic behind wanting to have additional allocation to emerging markets, so by all means go for it. Don’t be too disappointed if it doesn’t perform significantly better than a global tracker over the long term though.

I also wouldn’t invest in an Emerging Market fund (or any fund for that matter) for a couple of years. You should really be investing for the long term.

Steve182

I would invest in EM's for 10 years+
Vietnam and India both tipped to do well in the long term....

https://enterprise.press/wp-content/uploads/2018/10/HSBC-The-World-in-2030-Report.pdf
https://www.pwc.co.uk/who-we-are/regional-sites/northern-ireland/press-releases/world-in-2050.html

benbay001

My thoughts are that it may go up £75 and down £30 many more times in the future.

Thrugelmir

Which fund did you invest in?  You do realise that international shares will fluctuate with exchange rates not just underlying prices. The £ is no longer sinking but has progressively been recovering ground. 

dunstonh

i have recently put in £750 into an EM fund,  at one point it was about £75 up,  now it is about £30 down  .  This tells me it is quite a volatile sector?

One of the most volatile you can get.  Typically most investors would only have single digit allocations to emerging markets.

But my gut is that over a couple years, i think it should do reasonably well.

Or very bad as a couple of years is nothing.

maxsteam

Anyone looking at investing in emerging markets should research how investors in NMC Health and Luckin Coffee were treated. There are many more examples of companies in emerging markets duping investors in developed countries. It's not impossible that I might put a small amount into an emerging markets fund if prices dropped to where they were last Spring but I certainly would not invest in any small EM company shares.

Tolteca87

I put in the majority of my pension funds in emerging market ITs in my 20's. The funds valuations now mean I will be able to retire.

So, depends on your timeframe and a chose fund rather than single stocks if you don't know what you're doing re single stocks.

AlanP_2

Tolteca87 said:

I put in the majority of my pension funds in emerging market ITs in my 20's. The funds valuations now mean I will be able to retire.

So, depends on your timeframe and a chose fund rather than single stocks if you don't know what you're doing re single stocks.

Great, but are you 32 or 92, and when will you be able to retire?

aroominyork

dunstonh said:

i have recently put in £750 into an EM fund,  at one point it was about £75 up,  now it is about £30 down  .  This tells me it is quite a volatile sector?

One of the most volatile you can get.  Typically most investors would only have single digit allocations to emerging markets.

Emerging markets make up c.10% of global market cap so are you saying most investors would be underweight? I can imagine that as an IFA you do not go out on limb with your clients' money, but I am sure many indidivual investors do. I hold c.15% in EMs and am very comfortable with that, just as I am significantly underweight US since I do not want something like 60% in any one region.