Bigger, Growing Faster and more EM than projected

July 02, 2018 |Author: Edward Kerschner, CFA | Categories: Chart of the Week, Emerging Markets

Global Middle Class: bigger, growing faster and more emerging markets (EM) than projected. In 2010 seminal work was published by the OECD with a set of projections suggesting that the emerging middle class in developing countries was about to surge.1 New research2 now suggests that there were about 3.2 billion people in the middle class at the end of 2016, 500 million more than previously estimated. Already, about 140 million are joining the middle class annually and this number could rise to 170 million in five years’ time. An overwhelming majority of new entrants into the middle class—88% of the next billion—will live in Asia.

Slow-growing developed market (DM) and fast-growing emerging markets middle class. The global middle-class market is now clearly bifurcated: a slow-growing developed country middle class, and a fast-growing emerging economic middle class—with growth in both instances measured in terms of total population or total spending respectively. Big geographic distributional shifts in the markets are happening, with China and India accounting for an increasing amount of market share, while the European and North American middle class basically stagnates.

1 Kharas, “The Emerging Middle Class in Developing Countries,” Organisation for Economic Cooperation and Development (OECD) Development Center, January 2010.
2 Kharas, “The Unprecedented Expansion of the Global Middle Class,” Brookings Institution, February 2017.

Emerging market investments involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles, from economic or political instability in other nations or increased volatility and lower trading volume. Please call 888.800.4347 or click here to access a prospectus online. Investing involves risk, including possible loss of principal.

Index returns are for illustrative purposes only and do not represent actual fund performance. Index performance returns do not reflect any management fees, transaction costs or expenses, which could reduce returns. Indexes are unmanaged and one cannot invest directly in an index. Performance data quoted represents past performance. Past performance does not guarantee future results. Current performance data may be higher or lower than actual data quoted. For the most current index performance data please call 888 800 4347.

The content of this presentation is presented for general information purposes only. Nothing contained herein should be considered a recommendation or advice to purchase or sell any security. While the information and statistical data contained herein are based on sources believed to be reliable, we do not represent that it is accurate and it should not be relied on as such or be the basis for an investment decision. The statements and opinions expressed are those of Columbia Management Investment Advisers, LLC and are as of the date of this presentation. All information is historical and not indicative of future results, and subject to change. This presentation may include estimates, projections and other "forward-looking statements". Due to numerous factors, actual events may differ substantially from those presented. Columbia Management Investment Advisers, LLC assumes no duty to update any such statements. Past performance does not guarantee future results.

ETF shares are bought and sold at market price (not NAV) and are not individually redeemable. Investors buy and sell shares on a secondary market. Shares may trade at a premium or discount to the NAV. Only market makers or "authorized participants" may trade directly with the Fund(s), typically in blocks of 50,000 shares.