On a recent Mediterranean cruise, I spent a lot of time watching our TV screen showing the ship’s course plotted as a straight line.
I’ve always understood that if you draw a straight line on a map and then sail in that direction, you will eventually get to your destination. But hidden beneath that straight line is the history of modern maps, profound ideological symbolism, and lessons on power, inequality, and growth.
I learned that what I was watching is called a rhumb line: a path of constant compass direction. If I had to explain it to my six-year-old son I would say: “It's the path that the captain follows when he points the ship’s compass in one direction and then doesn't turn the steering wheel.”
Rhumb lines go back to 1569, when Flemish cartographer Gerardus Mercator published a world map for sailors. His innovation was to project the globe onto a cylinder touching the equator, then unroll it flat. When you do that, every line of constant bearing becomes a straight line on the map.
However, while the Mercator projection map was elegant cartography, it preserved angles and shapes, but not area. Landmasses near the equator are drawn roughly true to size, but everything toward the poles isinflated.
This means that Europe and North America appear visually dominant, while the equatorial world is shrunk. That normalises a hierarchy of importance that has little to do with the actual scale of what is there.
The vote that made it topical
In September 2026, this issue reached the United Nations when the UN General Assembly adopted a resolution that endorsed the “Correct the Map” campaign. It encouraged governments, schools and international bodies to adopt the Equal Earth projection instead of Mercator.
This is an equal-area map, which means that it sacrifices some of Mercator's angular precision to ensure that landmasses are shown in the correct proportions. Proponents argue that this matters well beyond aesthetics. It is a prerequisite for fair recognition in global economics, resource allocation and climate negotiations.
The same distortion… in portfolios
This is where the topic earns its place in an investment debate. Global equity portfolios have their own version of the Mercator distortion, where certain investment opportunities are minimised, if not unseen.
Consider that the countries classed as emerging markets (EM) collectively represent roughly half of global GDP. Yet they only make up around 11% of the MSCI All Country World Index by market capitalisation. This gap reflects where capital has historically been concentrated, not where economic activity exists.
This shows up in valuations too. Emerging market equities trade at close to a 40% forward price-earnings discount to developed markets. This is nearly the widest valuation gap in two decades, even after a year in which the MSCI EM Index materially outperformed the S&P 500.
That combination of deep discount and strong delivered returns is precisely the pattern we would expect if a benchmark is systematically underweighting genuine growth. The market keeps re-rating, but the starting point keeps looking cheap.
Identifying the opportunity
The underlying growth story in these regions is not speculative. It is driven by fundamental drivers. Africa is growing at around 4% to 5% annually. This is carried by a population that will add more working-age people between now and 2050 than any other region on earth.
African equities enjoyed their best year in over a decade in 2025 and showed continued strength into the first half of 2026. Yet valuations remain broadly at fair value (11.1x forward P/E). Together with expected earnings growth of around 16%, our base case is that we should see USD returns of between 11% and 26% over the next 12 months from this region.
Southeast Asia offers a different theme. It is benefiting from manufacturers diversifying away from China. Vietnam's export economy and Indonesia's large-scale digital market are prime examples of countries benefiting from this reallocation.
Latin America is growing more slowly, but it carries its own optionality. This includes nearshoring flows into Mexico, and a lithium triangle across Argentina, Bolivia and Chile that holds roughly half the world's known reserves.
The lesson is not that emerging markets are “underweighted therefore undervalued, always.” It's that a benchmark weighted by historical capital allocation is not the same thing as a map of where the world's growth, population and resources actually sit. Investors who mistake one for the other are navigating by a projection that was never built to show them to scale.
Within the Old Mutual Balanced Fund, we hold meaningful emerging market equity exposure on broadly this reasoning. It also aligns with our views around the secular decline of the dollar and the need to hold more exposure to hard assets.
The projection was never the territory
Sailors have always known something that flat maps obscure: the straight line and the true line are not always the same line. For nearly half a millennium, the world largely saw itself through a lens built for compass bearings and mistook the picture for the proportions.
That map is undergoing a sea change. Portfolios, in time, may follow, not because the growth in emerging markets is new, but because more investors are finally looking at the version of the map where it was always visible.
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