The emerging market (EM) consumer theme is not new, and research on this long-term trend suggests that it should endure. Based on our own calculations, the quantum of EM consumption surpassed $13 trillion in 2015, with growth accelerating from 2003 onward. As such, we believe that harnessing the EM consumer opportunity should be central to most emerging market investment strategies.
The scope and demographics of the global middle class are reshaping the global economy in the 21st century. These changes have just begun. A new global middle class is emerging. Reaching the middle class is not just an aspirational benchmark, but signifies when consumption levels begin to grow exponentially. The size of the global middle class is projected to increase from 1.8 billion people in 2009 to 3.2 billion by 2020 and to 4.9 billion by 2030 - and 85% of this growth comes from Asia. Learn about Driving Growth in Emerging Markets
Smaller, less developed non-BRIC Emerging Market (EM) and Frontier Market (FM) economies - i.e., non-BRIC developing countries - have the potential to generate growth. However, investors face challenges accessing these investment opportunities due to the trade-off between portfolio liquidity and diversification. In Passing the Baton, we identify and explore investment opportunities in the non-BRIC developing countries, which could offer the growth and diversification characteristics that are missing in mainstream EM indices today.
India stands out among emerging market (EM) economies as the fastest growing EM country over the next five years with a combination of demographic trends, investment and economic reforms. Notwithstanding that the India stock market has been lagging broader EM in 2016, the longer term is positive and rapid economic growth can continue to be achieved through three key pillars of support: consumption, investment, and reforms. This Investment Strategy Commentary explores these key pillars of support and why India is poised to be the next great emerging market.