How the risk of interest rate can be bloke
aged or diversified when investing in emerging market?
Fidelity invest a large pool of their portfolio in emerging markets, how it can manage thr risk of interest rate, bcoz economy of emerging market like india, china, brazil ans latin american countries are higly volatile. so how a company can diversify the risk of unstable interest rate.
Answer
They would invest in a variety of markets, not
one, the risk would be hedged and spread among for example, real estate, petroleum, banking, forestry, bonds, futures, this type of thing, the emerging markets that you mention are all thriving markets now, the volitility has more to do with inflation
than interest rates. when a market is growing quickly as in the case of china which for 2007 forecasts
double digit figures and brazil forcasting 5% to 6% growth, the inflationary forces are what have to be controlled. brazils elections were recently an eventful occaison but i did notice that the markets ( currency in particular) not very
flickered! nice
sign of increased stability really.
