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Emerging markets are already on the road to recovery

Don’t wait for the UK to bounce back – emerging markets are already on the road to recovery: There’s a world of ways to revive your investments

By ROSIE MURRAY-WEST, FINANCIAL MAIL ON SUNDAY
PUBLISHED: 21:52, 13 February 2021 | UPDATED: 10:08, 14 February 2021

Talk of a bounce back from the economic devastation wreaked by Covid-19 may feel a little premature in the UK. We are still in the midst of it all. But some countries are enjoying the first signs of recovery.

So-called emerging market economies have started to see strong growth and many investment experts believe they present good long-term opportunities for investors…

Investing in emerging markets is generally seen as riskier than developed markets…

But this year, the IMF says emerging market economies should rebound by six per cent, with India, China and South-East Asia ahead with eight per cent growth…

COUNTRIES TO WATCH OUT FOR IN THE COMING YEAR

As the emerging markets sector is so broad, national economies within it are likely to perform very differently in the next year…

CHOOSING FUNDS FROM EMERGING MARKETS

One of the easiest – and best – ways to gain exposure to the vast and diverse emerging markets world is to invest in a fund run by a specialist manager who can balance the different economic stages and recovery plans of emerging market economies…

PICKING ONE COUNTRY…OR EVEN ONE SECTOR

Since the emerging markets sector covers so many disparate countries and businesses, some investors may prefer to put their money in emerging markets funds with a particular focus.

James Carthew, head of investment trusts at research company QuotedData, believes a Latin America fund could help investors benefit from a bounce back in the region.

‘There, vaccination programmes could spur a sharp economic recovery,’ he says. ‘Regional funds such as Aberdeen Latin American Income and BlackRock Latin American Income could have a better year.’

Aberdeen’s Latin American Income fund yields over five per cent and the BlackRock fund 4.6 per cent. In Asia, he picks Aberdeen New Thai, which has been under pressure due to the impact on the Thai economy of a lack of tourism.

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