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Emerging markets are an opportunity for growth-oriented investors — they are almost 40% of global GDP, and demographic trends suggest this will continue to grow. However, simply buying into the emerging market benchmark index provides little exposure to the largest growth opportunity. The big story in emerging markets today is the consumer sector. The rising affluence of more than three billion largely emerging market consumers is causing this sector to grow more rapidly than emerging markets as a whole. Emerging market benchmarks only have modest exposure to the consumer sector, accounting for about 15% of assets. In this video Ed Kerschner discusses how investors who are attracted to emerging markets can get the most out of their investment.
The views expressed are as of October 2016, may change as market or other conditions change and may differ from views expressed by other Columbia Management Investment Advisers, LLC (CMIA) associates or affiliates. Actual investments or investment decisions made by CMIA and its affiliates, whether for its own account or on behalf of clients, may not necessarily reflect the views expressed. This information is not intended to provide investment advice and does not take into consideration individual investor circumstances. Investment decisions should always be made based on an investor's specific financial needs, objectives, goals, time horizon and risk tolerance. Asset classes described may not be suitable for all investors. Past performance does not guarantee future results, and no forecast should be considered a guarantee either. Since economic and market conditions change frequently, there can be no assurance that the trends described here will continue or that any forecasts are accurate.
International investing involves certain risks and volatility due to potential political, economic or currency instabilities and different financial and accounting standards. Risks are enhanced for emerging market issuers.
“It’s three billion new consumers.” Source: Ernst & Young, “Innovating for the next three billion”, 2011.
“The consumer sector that is attracting you…where the growth is the best.” Source: Kharas, “The Emerging Middle Class in Developing Countries,” OECD Development Center, January 2010.
MSCI Emerging Markets (EM) Index is designed to measure the equity market performance in global emerging markets.
S&P 500 Index is a broad-based measure of U.S. stock market performance.
Dow Jones Industrial Average is a price-weighted average of 30 significant stocks.
It is not possible to invest directly in an index.
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