Thinking strategically about Emerging Markets

In the last 10 years, emerging countries have provided the bulk of the growth of the world economy. Discover what this means for investors.

Emerging markets (EM) are different to what they were 10 years, or even five years ago. Emerging economies represent 60% of the world's economic output, the bread and butter to global economic growth. We now need to look at them through a different lens.

Given the blistering pace of change in key indicators, we want to invite you on a journey to help you better understand the structural changes these countries have undergone. Fasten your seatbelts, it's going to be a stellar ride.

Did you know?

"Emerging markets" is an often imprecise term used to describe the group of low- and middle-income per capita nations pursuing political and economic reforms and a more complete integration into the global economy.

In general, emerging market countries have less mature economies and capital markets compared to developed countries, and have significant potential for economic growth and increased capital market participation by foreign investors. Exact definitions vary greatly even among large multilateral institutions such as the International Monetary Fund, the World Bank, and the United Nations. At UBS, we apply a broad definition that enables us to find the best investment opportunities for our clients.

The changing face of the Emerging Markets

Key stats

Emerging markets are now minting billionaires at a rapid pace, with the total number of ultra-wealthy individuals expanding by a factor of 14 since the year 2000, compared with the tripling of developed world billionaires over the same period.

Emerging economies, now 60% of global output, have become too hard to avoid, whether you invest in them or not.

In the last 10 years emerging markets have provided the bulk of global growth, though in recent years the gap has narrowed as China has slowed down.

More content

This report illustrates the rapid structural change these countries have undergone since the turn of the century. We also demonstrate that despite the volatility and drawdowns in emerging market assets over this period, including them in a buy-and-hold, strategic global portfolio can improve the risk-reward balance, provided that exposure is well diversified across assets classes and geographies.

Did you enjoy this read?

Find out which questions we are currently tracking