The rise of emerging markets have transformed the global economy and the way investors allocate capital over the past 25 years. It has become increasingly synchronised reflecting their enhanced integration into global trade and capital flows, with China at the epicentre of this shift. As measured by purchasing power parity (PPP), China has risen from less than 3% of global economic output in the early 1980’s to around 16% in 2014. There are however, ominous signs the rise of the developing world is starting to unravel, with emerging markets suffering a net outflow of capital for the first time since the 1980's. Part of this is down to the US Federal Reserve raising interest rates, the significant moves in the US dollar over the past 18 months and the effects of quantitative easing on risk assets. So where does this leave one of the world's most investable themes? (VIEW LINK)
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