But while it's one challenge to recognize these trends, it's another to capture them.
That's where we believe an active approach to stock selection and investment management can create value for investors.
The rapid change in EM means emerging sectors are often under-researched and benchmarks tracked by passive managers tend to look backwards to the performing sectors of the past, rather than to the new, innovative sectors driving the future.
Having a team of sector and country experts taking a bottom-up approach to new emerging industries, doing detailed on-the-ground research on market conditions, applying rigorous company assessments, and compiling the best ideas across EM can capture new emerging trends before they are picked up in the markets.
Outside of trading up, we are seeing many other secular growth trends play out in EM, including the ongoing shift from offline to online retail, steady innovation in the IT space, and growth of financial services, and we believe these are long-term trends that investors simply can't ignore.
And as these trends play out, they add up to compelling reasons to take a closer at EM, because they will propel the region for many years to come.