Emerging markets are not the “smaller, riskier siblings” of developed markets anymore and are playing an increasingly important role in global growth, RCM has informed.

Speaking at an investment conference in London today, RCM chief investment officer of global emerging markets Dilek Capanoglu said that a number of investors still regard allocation and investment exposure to this asset class as being “too risky” and “not mainstream enough” as a result of hyperinflation and political risks within emerging market economies.

“The outlook for emerging market equities is immense and actually better than perceived. Since the financial crisis of 2008 emerging markets have introduced the necessary reforms; they now have a fiscal discipline and have reformed their banking systems.

“There is a huge consumer base in emerging markets and emerging market investment should be part of any investment portfolio,” she said.

According to statistics from the IMF world economic outlook report, public debt in the emerging markets and developed countries has fallen from around 50% of GDP to around 30%. Credit ratings for emerging countries have remained largely stable or positive from the pre-financial crisis in 2007 through to August 2011.

It also claimed that by 2025, China’s luxury goods market could grow as large as US $238 billion - around 18 times its current size - therefore increasing investment opportunities for investors.

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