Something to take G20 Cannes delegates’ minds off Greece…
How’s this for evidence that the emerging markets growth story is overblown? Of all the G20 countries, the US would have given you the greatest equity returns over the past year, not Brazil or China.
That’s right, the US equity market was the best performer on a total returns basis, according to S&P’s Global Broad Market Index, which includes approximately 11,000 stocks.
Investors in the US would have received 8.12 per cent, compared with 6.75 per cent from second place South Korea and -15.73 per cent from China (ouch!).
So the EM equity bears have got it right then? Well not exactly.
Over a five-year basis investors in the US would have received total returns of 0.84 per cent and investors in the UK would have lost 1.38 per cent (and don’t even ask about Italy).
Meanwhile, Indonesia managed annualised total returns of 18.78 per cent, Brazil saw 14.75 per cent growth and China 10.6 per cent.
All aboard the EM train then?
Yes. But remember, every family has its black sheep. Over the past five years it was Russia, which returned -3.57 per cent over the period.
Related links:
Dad, where does growth come from? – FT Alphaville
Time to revisit/rethink EM equities? – FT Alphaville