Emerging markets to outperform: Mobius

EMERGING markets (EM) will outperform developed markets this year, a reversal of its trajectory in the past couple of years, says Mark Mobius, executive chairman of Templeton Emerging Markets Group.

"The outlook is now quite good. We're beginning to see some traction. Structurally, emerging economies are growing at double the rate of developed economies so it's still the place to be. They now represent 30 per cent of the total market capitalisation of the world."

In the past two to three years, investors have shifted funds to developed markets, in particular the US, and EM has lagged significantly. But year-to-date data indicates some recovery. Based on MSCI indices, EM has returned 8 per cent so far this year, compared to the World Index's 4.06 per cent and S&P 500's 2.6 per cent. Over the past three years, EM returned 0.4 per cent on an annualised basis. The World Index returned 11.55 per cent, and S&P 500, 14 per cent.