5 reasons to reconsider emerging markets
Author: Sound Choices
November 22, 2018
What do you need to know about emerging markets?
The content in the below article is meant for Canadian investors only.
#1 – What are Emerging Markets?
#2 – Major driver of global economic growth
EM countries now contribute more to the world’s GDP than the G7 countries (Canada, France, Germany, Italy, Japan, the United Kingdom and the United States).
Source: World Economics, Barclays Research as of March 2017.
#3 – Growing consumer demand
The growing middle class is driving the increasing consumption of goods and services in many emerging markets.
This has led to greater domestic innovation to capture this growing demand, which provides a compelling backdrop for continued innovation and investment opportunities.
Data is real household consumption annual growth. *Indonesia, Malaysia, Philippines, Thailand. **Hong Kong, Singapore, Korea, Taiwan. Source: IMF, Thompson Reuters as at March 2016.
#4 – Technology revolution
Reflecting the growth and impact of technology innovations, the Information Technology sector has now surpassed the size of Energy and Materials sectors in the emerging markets major benchmark (MSCI EM Index).
Source: MSCI, Thomson Reuters Datastream, HSBC, August 2018.
#5 – Not just equities
Emerging market bonds can also provide greater diversification for portfolios. The chart below shows the performance of different types of fixed-income investments vary from year to year. Holding a variety of different types of bonds can help lower risk and create opportunities for growth.
Source: Morningstar, as of December 31, 2017, in Canadian dollars. For illustrative purposes. You cannot invest in an index..
To learn how emerging markets investments could fit into your portfolio, talk to your financial advisor or read more about Emerging Markets at AGF.com.
©2018 Morningstar. All Rights Reserved. The information, data, analyses and opinions contained herein (1) include the confidential and proprietary information of Morningstar, (2) may include, or be derived from, account information provided by your financial advisor which cannot be verified by Morningstar, (3) may not be copied or redistributed, (4) do not constitute investment advice offered by Morningstar, (5) are provided solely for informational purposes and therefore are not an offer to buy or sell a security, and (6) are not warranted to be correct, complete or accurate. Except as otherwise required by law, Morningstar shall not be responsible for any trading decisions, damages or other losses resulting from, or related to, this information, data, analyses or opinions or their use. This report is supplemental sales literature. If applicable it must be preceded or accompanied by a prospectus, or equivalent, and disclosure statement.
The MSCI information may only be used for your internal use, may not be reproduced or disseminated in any form and may not be used as a basis for or a component of any financial instruments or products or indices. None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an “as is” basis and the user of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the “MSCI Parties”) expressly disclaims all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages. (www.msci.com).
The information contained in this brochure is based on material believed to be reliable and is provided as a general source of information and should not be considered any personal investment or tax advice. Every effort has been made to ensure accuracy at the time of publication, however AGF Management Ltd. and its affiliates cannot guarantee 100% accuracy of this information, and is not responsible for the development and creation of this material. It is important for investors to consult with their financial and tax advisors before making any investment or tax planning decisions.
The contents of this Web site are provided for informational and educational purposes, and are not intended to provide specific individual advice including, without limitation, investment, financial, legal, accounting or tax. Please consult with your own professional advisor on your particular circumstances.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
For further information, please visit AGF.com.
© 2020 AGF Management Limited. All rights reserved.