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
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.
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