Let me start with the overview on slide four. This gives you a picture of the growth differences between the emerging countries and developed countries.
On slide five; you can see the yield spread between emerging market bonds and US treasuries.
When that spread comes down, that implies that people are willing to invest more in emerging market bonds at a lower interest rate, relative to US treasuries, and therefore are more bullish on emerging markets and so the emerging market stock index goes up.
Slide number six gives you a summary of the emerging markets since 1988, when we first started in emerging markets. During that period there have been three bear markets––in this case we define a bear market as a market that has declined more than 30%––and those were the:
• Asian financial crisis
• Tech bubble (the internet stock bubble)
• Recent subprime crisis
The important point I want to make is that these bear markets were fairly short-lived; they didn’t last very long. You can see those three bars are very short and that bull markets last longer. Given that, we always like to be invested, because we really don’t know when there’s going to be a bear market, and once you’re in it, it’s too late to jump out and probably not a good thing to do because it’s not going to last very long and then you’ll be in a situation of chasing the market up. So, we like to be fully invested as much as possible and are generally quite bullish because you’re better off being in than being out.