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Johannesburg - Emerging markets will continue to outperform the world and the United States, Mark Mobius, executive chairperson of Templeton Asset Management's Emerging Markets Group, said on Tuesday.
Mobius was speaking at a presentation in Johannesburg.
"In 2010 emerging markets outperformed the world and the US - they did so five years ago too and also 10 years ago; indeed as the years go by the gap becomes wider and wider, which is why we continue to preach long-term investment," he said.
Mobius has always been of the opinion that to put money in the highest quality emerging markets companies, one needs to have patience as well as a comprehensive understanding of how a company is likely to perform - not just in the immediate future, but in the next three to five years.
"If you're trading in and out the market I would say that is a mistake. You must take a position with a company or fund that you trust - when it goes down, buy more and when it goes up, sell a little if you need cash, but hold on because that's the way to real wealth."
He said it was important to monitor the supply and demand for emerging market stocks, with the number of initial public offerings (IPOs) set to double in the coming year.
On the supply side, since 2000 emerging market IPOs and secondary issues had taken a larger share of the global IPO and secondary issue market.
"In 2001 it was 10% and now it's almost 50% - and in 2010 there were more emerging market IPOs and secondary issues than any year before."
Mobius said that in terms of total world market capitalisation, in 2000 emerging markets represented 8% but now had shot up to 32%.
There was, however, still demand for emerging markets exposure as global investors remained underweight in this sector.
"I'm not telling you to go out tomorrow and put 32% of your assets in emerging markets, but I am telling you to be aware that you are behind."
Mobius said it was important to remember that emerging markets typically had faster economic growth than developed countries.
"Growth is one of the reasons we're in emerging markets."
Mobius was speaking at a presentation in Johannesburg.
"In 2010 emerging markets outperformed the world and the US - they did so five years ago too and also 10 years ago; indeed as the years go by the gap becomes wider and wider, which is why we continue to preach long-term investment," he said.
Mobius has always been of the opinion that to put money in the highest quality emerging markets companies, one needs to have patience as well as a comprehensive understanding of how a company is likely to perform - not just in the immediate future, but in the next three to five years.
"If you're trading in and out the market I would say that is a mistake. You must take a position with a company or fund that you trust - when it goes down, buy more and when it goes up, sell a little if you need cash, but hold on because that's the way to real wealth."
He said it was important to monitor the supply and demand for emerging market stocks, with the number of initial public offerings (IPOs) set to double in the coming year.
On the supply side, since 2000 emerging market IPOs and secondary issues had taken a larger share of the global IPO and secondary issue market.
"In 2001 it was 10% and now it's almost 50% - and in 2010 there were more emerging market IPOs and secondary issues than any year before."
Mobius said that in terms of total world market capitalisation, in 2000 emerging markets represented 8% but now had shot up to 32%.
There was, however, still demand for emerging markets exposure as global investors remained underweight in this sector.
"I'm not telling you to go out tomorrow and put 32% of your assets in emerging markets, but I am telling you to be aware that you are behind."
Mobius said it was important to remember that emerging markets typically had faster economic growth than developed countries.
"Growth is one of the reasons we're in emerging markets."
