Emerging markets (EMs) represent a unique investment landscape where opportunities for substantial growth coexist with heightened risks. These markets, often characterised by rapid economic development, expanding consumer bases, and untapped resources, have become an attractive option for investors looking to diversify their portfolios and capitalise on global growth trends. However, the path to reaping rewards from emerging markets is not without challenges. Understanding both the opportunities and the risks is key to navigating this dynamic investment terrain successfully.
What Are Emerging Markets?
Emerging markets refer to economies that are in the process of rapid growth and industrialization but are not yet classified as developed markets. These countries are typically transitioning from a low-income, agriculture-based economy to a more industrialised, service-oriented one. Key characteristics of emerging markets include fast-growing GDPs, an expanding middle class, and an increasing presence in global trade. Some well-known examples of emerging markets include China, India, Brazil, …