He also talks down the rising rates of inflation across emerging markets. While Vietnam battles a rate of 25 per cent, and the average across the emerging world looms at 9.3 per cent in comparison to that of the US at 5.5 per cent, the problem is nowhere near the scale of 1990, when inflation across emerging markets climbed close to 90 per cent. But there are still valid concerns. “Since 2006, inflation in the emerging markets has been accelerating. Compared to the US, it is twice as high.”

Looking beyond these setbacks, Templeton expects the commodities and consumer goods sectors, and increasing overall trade in emerging markets, to lead growth in the asset class in coming years. “There are more people and more consumers in the emerging markets. That’s where you have to be. And per capita income in these countries is growing at a rapid rate – which means more consumers.”

In the five years to 2007, gross domestic product (GDP) growth per capita in developed markets was 38 per cent. In emerging markets, it was 110 per cent, Templeton calculates. Trade involving the emerging markets as a percentage of global trade is now 45 per cent, indicating that, while the US is important, it is “no longer the driver of trade.”

The showcase consumer item amid this growth in projected consumer demand is the mobile phone, Mobius says. The market penetration rate of mobile phones among Italians is 153 per cent and 122 per cent in the UK. In China and India, which have far larger populations, the respective penetration rates are 43 per cent and 23 per cent. “They are far behind, and we believe they will catch up.”

But macroeconomic momentum does not necessarily make stock selection an easy job. The persistent challenges of emerging markets – from inaccurate disclosure of company information, shoddy corporate governance and volatility, to political and social unrest – mean that investors can be susceptible to hidden risks. Once, when Templeton was checking up on an investment it had made in a Brazilian apartment block developer, analysts were met by a financial manager from the business who said the numbers were solid and all was in order. Some months later, the company collapsed. Upon visiting the Comissão de Valores Mobiliários, the market regulator, to find out what action could be taken, Templeton was greeted by the same financial manager, dressed in official clothes. “We had nothing to say,” Mobius says.

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