Ashmore Emerging Markets Strategy Phase 3
Emerging Markets
Structural growth and investment opportunities in inefficient markets
•
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Growth underpinned by powerful economic convergence
trends with the developed world
Large investment universe, set to grow further
- USD 71trn in equities and fixed income, of which only
USD 5trn is hard currency sovereign/corporate bonds
- 156 developing countries, approximately half of which
have not issued tradable debt
Emerging Markets' increasing significance
84%
of the world's population
lives in an emerging
country, and the
demographics are typically
more favourable than in
developed countries
58%
Ashmore
of the world's GDP is
generated by emerging
countries. Future growth is
underpinned by low GDP
per capita levels that are
converging with developed
countries
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Low index representation
- Only 17% of bonds and 22% of equity market cap are in
benchmark indices
Opportunities for active management, and rising
indexation drives higher allocations
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Local currency funding
- More than 85% of funding is through local bond issuance
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Important development that increases resilience of
25%
of world bond issuance and
33% of equity market cap
are in Emerging Markets,
providing substantial
opportunities for growth as
economies converge
Emerging Markets, needs high-quality policy making
Underweight allocations
EM is 13% to 28% of global benchmarks, and rising, but
investors have <10% allocations
75%
of the world's foreign
exchange reserves, or USD
9 trillion, are controlled by
emerging countries' central
banks
13%
to 28% weighting of
Emerging Markets in global
benchmark indices, rising
over time as markets grow
and become more
accessible
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