Which way are emerging markets going to turn?

Casual observers might think that 2016 was a disappointing year for so-called emerging markets. But the fact is that some of these economies have delivered the year's best investment returns, while certain developed-country markets have fared poorly. If a United Kingdom resident who has personal obligations in Brazil had hedged all of his Brazilian real into pound at the start of the year, he would have lost almost 50 percent of his investment.

Indeed, Brazil is not the only emerging country whose markets performed better than expected in 2016. Yet this is easy to miss when, more than 15 years after I coined the BRIC acronym (Brazil, Russia, India and China), people are still lumping a diverse range of countries into a single "emerging markets" category which confuses more than it illuminates.

This approach makes little sense: there is nothing "emerging" about the Republic of Korea, whose per capita GDP is close to that of the less wealthy eurozone countries; or about China, where the United States' most iconic company, Apple, sells more products than it does in the US itself. Most successful investors probably figured this out some time ago, but others should take note of it in the coming year.