Pension funds urged to invest in emerging markets

We are happy to present yet another guest feature by our by now regular contributor Dr. Sam Subramanian from alphaprofit.com: Emerging Markets: Investment Choices and Risks Sam Subramanian During the global recession, equities in emerging nations declined more than those in developed nations. From its high in 2007 to the low in 2008, the iShares MSCI Emerging Markets Index Fund (EEM) declined 67% compared to the 62% decline in iShares MSCI EAFE Index ETF (EFA).

"Political risk has entered our vocabulary," writes Ian Bremmer pointing to the fiscal cliff, the eurozone crisis, and the turmoil in the Middle East.

A recent NY Times article highlights how U.S. financial firms have been expanding into emerging markets in an effort to boost profits in the face of weaker U.S. earnings and rising regulatory costs (see Emerging Markets Offer Banks Profits, but Headaches Too).

By Econ Grapher:This week we check in on the current inflation and monetary policy situation for the key developed economies and emerging markets, with a particular focus on the outlook for inflation and interest rates, and the likely consequent outlook for developed vs emerging market equities. Overall it's looking like the monetary policy outlook may become more friendly to emerging markets than developed markets, but of course that could all change if certain key risks materialize ...

Late last month, leaders from Brazil, Russia, India, China and South Africa – the so-called BRICS – announced they were forming their own development bank to assist other emerging economies.

During the middle of the last decade, it seemed as though Chinese and Indian stocks were only heading higher. Between 2005 and 2008, China’s equity markets soared 219% while Indian markets rose 181%. However, from 2009 through 2011, impaired by a volatile global economy, Chinese equities floundered in negative territory and, over the same period, Indian equities were barely in the black.

Britain's worst investment and pension funds are named and shamed today in a "Spot the Dog" report published by financial advisers BestInvest.

ETF Database submits: As the term ‘BRIC’ has entered the average American’s lexicon over the past two decades, many investors have seen the promise and peril of exposure to these rising superpowers. As more have invested and globalization has occurred, the correlation between these markets and industrialized nations has risen substantially; the once untapped markets see billions of dollars flow into and out of their markets based on the risk appetites of developed market investors.