UK-based emerging markets specialist Ashmore Investment Management predicts emerging market growth of 6 per cent in 2013. The firm believes that investors, currently frustrated in their search for real growth, will increase their currently underweight emerging market allocations.

In its Market Prospects 2013 report, Ashmore explains that emerging markets have much faster growth, much less debt, greater external balances and fewer structural problems than the US and Europe. As 2012 showed, these economies do not rely on strong growth in the highly-indebted developed countries to have strong growth of their own, the bulk of growth in emerging markets being due to domestic factors.

Among the largest EM players, China is showing signs of getting back to work following its leadership transition; India has resumed reforms with positive implications for growth, currency and government popularity; Russia is well on its way to launching its euro-clearable OFZ market amid a broader move towards flexible exchange rates; and Brazil looks set to triple its growth rate in 2013.

Ashmore predicts that emerging markets currencies and equities are both likely to perform strongly in 2013. The firm says that they are cheap compared to the other emerging market asset classes, compared to their own past valuations and compared to their counterpart asset classes in the heavily-indebted developed countries.