Are Emerging Markets on Your Radar?
Emerging markets equities can help enhance long-term portfolio growth, supported by positive trends and shifts in market leadership.
Economic diversification, favorable demographics and better economic and monetary policies have improved both the breadth and quality of emerging markets (EM)1 opportunities.
Strong Companies, Improving Economies
MSCI Emerging Markets Index Sector Exposure (%)
Source: Factset and Martin Currie. 2008 sector exposure is as at 1 January 2008. 2019 data is accurate as at 30 September 2019. Other includes Industrials, Utilities, Healthcare and Real Estate.
Rapid Economic Growth
Projected GDP growth, 2019-2023
Source: International Monetary Fund, World Economic Outlook Database, October 2019. Values represent the average of calendar year GDP growth projections for 2020 - 2024.
Over 90% of citizens in India are biometrically registered
Source: UIDAI as of December 31, 2018.
Valuation of Developed and Emerging Markets
Attractive market valuations5
Source: Bloomberg, as of December 31, 2019. Past performance is no guarantee of future results. Indexes are unmanaged, and not available for direct investment. Index returns do not include fees or sales charges. This information is provided for illustrative purposes only and does not reflect the performance of an actual investment.
A Sector Made for Active Managers
1 Emerging markets are nations with social or business activity in the process of rapid growth and industrialization. These nations are sometimes also referred to as developing or less developed countries. Developed markets refers to countries that have sound, well-established economies and are therefore thought to offer safer, more stable investment opportunities than developing markets.
2 Source: Bloomberg, as of 1/28/20. At the end of 1999 there 23 EM companies in Bloomberg’s top 500 global companies ranked by market capitalization. As of 1/28/20, there were 105.
3 The MSCI Emerging Markets (EM) Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets.
4 Source: International Monetary Fund, World Economic Outlook, October 2019. Developed economies or developed markets refers to countries that have sound, well-established economies and are therefore thought to offer safer, more stable investment opportunities than developing markets.
5 The MSCI World Index is an unmanaged index of common stocks of companies representative of the market structure of 22 developed market countries in North America, Europe and the Asia/Pacific Region. The price-to-book (P/B) ratio is a stock's price divided by the stock’s per share book value. Return on equity (ROE) is the amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested.
6 The S&P 500 Index is an unmanaged index of 500 stocks that is generally representative of the performance of larger companies in the U.S. As of 12/31/19, the MSCI Emerging Markets Index had 1,404 constituent companies compared with 505 for the S&P 500.
In this MarketWatch article Portfolio Manager Andrew Mathewson discusses how Martin Currie is taking advantage of shifting trends in emerging markets.
Connect with Emerging Markets Growth Potential
The Martin Currie Emerging Markets strategy seeks long-term capital appreciation through high-conviction portfolios that invest in emerging market companies across geographies and sectors. Available as both a fund and separately managed account, the strategy embeds Environmental, Social and Governance analysis into the investment process.
More on EM Now
A huddle of negative factors cooled investor sentiment toward emerging markets in 2018. Some of these factors have reversed, and more could follow.
Understanding trends among Chinese consumers is a key factor in assessing the Chinese equity market.
Makers of semiconductors are seeing valuations hit amid a cyclical downturn, but the future long-term growth picture remains intact.
IMPORTANT INFORMATION: Past performance is no guarantee of future results. All investments involve risk, including loss of principal. Please see each product’s web page for specific details regarding investment objective, risks, performance and other important information. Review this information carefully before you make any investment decision. Additional share classes and products may be available.
Indexes are unmanaged, and not available for direct investment. Index returns do not include fees or sales charges.
The opinions and views expressed herein are not intended to be relied upon as a prediction or forecast of actual future events or performance, or a guarantee of future results, or investment advice.
Active management does not ensure gains or protect against market declines.
Equity securities are subject to price fluctuation and possible loss of principal.
International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets.
Diversification does not assure a profit or protect against market loss.
Forecasts are inherently limited and should not be relied upon as indicators of actual or future performance.