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.
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