Say Goodbye to Your Grandfather’s Emerging Markets

(Bloomberg View) -- This week, we meet with James Donald, head of Lazard Asset Management’s Emerging Markets Equity team. He joined Lazard in 1996, and has been instrumental in developing and coordinating its emerging-markets activities.

Think of investing in emerging markets, and one tends to think of commodities, and therefore the U.S. dollar. That may have been true in the past, but it is no longer the case. Commodities now account for only 15 percent of EM economies, down significantly from just a decade ago. Manufacturing and technology have grown larger as a share of the typical EM country.

Donald notes that Russia, Brazil and South Africa could be the most unappreciated parts of the EM universe. He is also intrigued by the fundamental changes taking place in India; the subcontinent may not be inexpensive, but if it manages to get past some fundamental issues, it has enormous potential. And, he observes, China will soon graduate from its status as an emerging market country.

Our conversation transcript is here; his favorite books are referenced here.

You can stream/download the full conversation, including the podcast extras on iTunesBloombergOvercast, and Soundcloud. Our earlier podcasts can all be found on iTunesSoundcloudOvercast and Bloomberg.

Next week, we speak with Kathy Fisher, head of wealth and investment strategies at Alliance Bernstein.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Barry Ritholtz is a Bloomberg View columnist. He founded Ritholtz Wealth Management and was chief executive and director of equity research at FusionIQ, a quantitative research firm. He blogs at the Big Picture and is the author of “Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy.”

To contact the author of this story: Barry Ritholtz at britholtz3@bloomberg.net.

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