Assessing The Potential Benefits from Investing in Emerging Markets

C.D. Sinclair (Department of Accountancy and Business Finance, University of Dundee)
A.A. Lonie (Department of Accountancy and Business Finance, University of Dundee)
D.M. Power (Department of Accountancy and Business Finance, University of Dundee)
C.V. Helliar (Department of Accountancy and Business Finance, University of Dundee)

Managerial Finance

ISSN: 0307-4358

Publication date: 1 December 1996

Abstract

In the early 1990s growing numbers of investing institutions in the UK financial community crossed a threshold of awareness about the opportunities offered by the emerging stock markets of developing countries (ESMs); the returns per unit of risk, formerly considered by most fund managers to be unacceptably low because of the high risk factor, were frequently reappraised and judged to fall within the parameters of acceptability. Investment funds were set up which either invested solely in emerging markets or adopted a policy of investing a fixed percentage of their funds in these markets (Clark, 1991; Bailey and Lim, 1992). Well‐advertised instances of spectacular returns achieved by equities in emerging markets2 apparently persuaded fund managers to overcome their misgivings and to invest in these markets despite the continuing risks associated with such investment.

Citation

Sinclair, C., Lonie, A., Power, D. and Helliar, C. (1996), "Assessing The Potential Benefits from Investing in Emerging Markets", Managerial Finance, Vol. 22 No. 12, pp. 15-29. https://doi.org/10.1108/eb018595

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Publisher

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MCB UP Ltd

Copyright © 1996, MCB UP Limited

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