Emerging markets are a key part of today’s global economy and provide investors with access to some of the world’s most exciting opportunities. Although this asset class involves special risk compared to investments in developed markets, historically adding an emerging market investment to a diversified portfolio may lower its overall risk and increase returns.
DPRK investments fulfils the need to fund a strategic shift from a socialist economy toward implementing a “Chinese-style” market system, forming a Win-Win solution for the North Korean people and global Capitalists.
The country has an abundance of natural resources and a highly educated, well-trained and motivated workforce. Huge potential for profitable business is possible, due to relatively low levels of foreign business activity. Tomorrow the DPRK could be the hub of a dynamic new regional economy, one melding cost effective labour, abundant resources, inward investment, and local flair.
In addition, as developed markets increasingly move in concert with one another, emerging markets have become one of the few options still offering correlation. During the period from January 1988 through September 2004, for example, the correlation of emerging-markets (represented by the MSCI Emerging Markets Free Index) to the S&P 500 Index was 0.59. Meanwhile, the Russell 3000Â® Index, a broad measure of U.S. stock performance’s correlation to the S&P 500 Index, was 0.99.