Economic Growth
Emerging economies have become the world’s growth engine and are outperforming developed markets by a wide margin.
We believe the world economy could more than double by 2050, outstripping population growth, due to continued technology-driven production improvements. The 7 largest emerging economies are expected to grow twice as fast as the developed G-7 markets, and to represent 50 per cent of global GDP in 2050, with the G-7 countries at 20 per cent.
Enhanced Liquidity
Emerging economies are becoming a much larger portion of the investment opportunity set, as these markets have witnessed exponential growth in market capitalisation. Since 1985, emerging economies’ share of total global capitalisation has increased from 4 per cent to 25 per cent.
Diversification and Low Correlation
Emerging economies equities can be used as a source for diversification, when returns have relatively low correlations to the United States and other developed equity markets.
