The decade in markets

The decade in markets

The last decade has been the one when emerging markets steadily increased their importance. As chart 1 shows, while India’s share of world market capitalization increased from 0.5% in 2000 to 2.4% in 2009, and while China’s share in global market cap went up from 1.8% to 10.3% over the same period, the share of the US fell from 46.9% to 31%. _is shift in the equity markets re_ects the changes in the world economy, with the developing nations now accounting for a much larger share of global growth. Looked at from another perspective, the 2000s were a lost decade for equities in the developed markets.

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For example, the annual return from the MSCI US index over the last 10 years has been a negative 0.5% and the developed country World MSCI index has given annual returns of 0.4%. In sharp contrast, the MSCI Emerging Markets index has given an annual return of 12.6% in the last decade, while MSCI India has returned 16.1%.

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