Equities like apples to oranges

26 April 2007
| By Glenn Freeman |

According to some asset managers, comparing international and domestic equities is not as simple as it might seem. This is because of the relatively recent distinction between ‘traditional’ international markets and ‘emerging’ international markets.

The term ‘traditional’ refers to the US and European markets, while ‘emerging’ encompasses Brazil, Russia, India and China, referred to as the BRIC countries.

Responding to the growing popularity in Australia for investment in BRIC countries, Standard & Poor’s and Dow Jones recently launched indices to capture these emerging markets.

Stuart James, associate director at Aberdeen, says that this is where the strong performances are to be found. “These only make up about 7 per cent of [traditional international funds], but emerging markets returned 42 per cent for the year up to May 31, 2006,” he says.

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