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Emerging markets set to take off, says Gartmore chief

Emerging markets are finally about to take off after several aborted attempts, claims Gartmore head of pacific & emerging markets Phillip Ehrmann.

Speaking at the Senate Programme in Monte Carlo, Ehrm- ann suggested that after several false dawns, emerging markets now represent great value and look poised to outperform developed markets in the next few years.

He said that over the last few years, emerging countries have undergone a period of introspection and financial rationalisation and stand ready to recover from their undervalued investment situation.

The main drivers for this economic recovery are better standards of corporate governance, increased privatisation and deregulation which in turn has led to higher levels of operating efficiencies and improved international competitiveness and the fact that developed nations are increasingly outsourcing production.

He also suggested that in the past, emerging market funds had been heavily skewed to Latin America and as recently as 1990, there were just 19 countries categorised as emerging. This has chan-ged, with up to 27 emerging countries giving investors more choice.

Ehrmann said: “This time it is for real. Emerging markets have outperformed developed nations in 2001 despite slowing global economic growth.

“The outlook also remains positive and we expect them to continue outperforming. The markets are fundamentally undervalued in terms of the spread and the nature of their business.

“They are likely to deliver better performance and substantial returns not dissimilar to that of the 1990s.”

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