Focus on EM's fundamentals
The reality of emerging markets is very different from preconceptions, and it pays not to be swayed by over-generalisations.
SETTLING for a broad-brush approach towards emerging market equities is far too prevalent. Looking beyond the headlines, and appreciating the fine detail, can give investors a crucial advantage in a sector where over-generalisation often masquerades as analysis.
A common misconception is that emerging markets are completely dependent on exports of commodities or cheap manufactured goods. In reality, many of today's emerging markets are at the forefront of fast-growing sectors like software and e-commerce. China leads the world in cashless payments systems, which its population has enthusiastically taken up.
Online shopping as a percentage of total retail sales was 18.4 per cent in China in 2018. In Germany it was only 11 per cent, and in France, 8.8 per cent.
