Explore Emerging Markets

Discover Great Opportunities in an Emerging World

Today, emerging markets contribute more to global GDP and exhibit greater trading volume than developed markets, excluding the US.

We believe we are still in the early stages of that growth runway and as emerging markets advance and the opportunity set expands, we are poised to find opportunities for our clients.

Emerging Markets versus Developed Markets
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A Voracious Appetite for Growth in Emerging Markets

We believe there remains significant room to run for growth in emerging markets. GDP has continued to rise and the public equity market’s percentage share has risen alongside it.

  • Understanding just how far these markets have come in the last few years in terms of total trading activity is astounding, in our opinion. Liquidity has been increasing and the fishing pond today is twice as big.
  • The last few years have seen a significant rise in trading activity, with emerging market equities averaging $23 trillion in annual trading volume—four times the average of the 2010s—and surpassing developed markets ex US, which have stagnated since 2009.
  • The opportunity set for emerging market large-cap investors has expanded, with the number of companies valued at $10 billion or more doubling from roughly 250 to approximately 500.

Understanding the growth potential in emerging markets is one piece of the picture, the other pieces are put into place when you choose to work with an investment manager who not only deeply understands the global markets but also puts client alignment at the forefront.

Total Dollars Traded (USD TR)
Total Dollars Traded (USD TR)

Source: Bloomberg. Total volume computed based on each security’s primary listing. Calculations may not reflect all trading volume inclusive of non-primary listings for the given security. For calendar year 2023, we estimate the full-year trading volume by annualizing the trading volume realized from January 1, 2023 through November 30, 2023. Actual results may differ from any projections illustrated above.

Optimism for the Road Ahead

Founder- and family-led businesses have been outshining non-family peers globally since 2006, boasting better margins, stronger growth, and robust balance sheets.*

  • These entities are more prevalent in emerging markets and in countries like India, Brazil, and Southeast Asia, where these businesses dominate, comprising over half of the major firms.
  • This founder- and family-led company prevalence suggests a closer alignment of management and shareholder interests, mitigating principal-agent conflicts and these companies are typically younger, amplifying their outperformance potential.*
  • If we look at emerging markets as a whole, the median country boasts a ~60% domestic shareholder base, in comparison to ~30% for the median country in developed markets ex US.

Why does it matter? This is yet another lens through which emerging market portfolios can harvest diversification benefits with fewer shareholder commonalities across emerging market countries as compared to what we typically see across countries in the developed markets. We believe there continues to be positive signposts indicating that opportunities in emerging markets have only improved with time and a slew of positive economic and government reforms support them.

Median Percentage Domestic Shareholder Base for Large-Caps Across Region-Country

*Authors: Eugene Klerk Richard Kersley Maria Bhatti Brandon Vair. Contributors: Akanksha Kharbanda Amit Phillips. ”Research Institute: The CS Family 1000 in 2018”, Credit Suisse, September 2018. 

BENCHMARK INFORMATION

MSCI benchmark returns have been obtained from MSCI, a non-affiliated third-party source. Neither MSCI nor any other party involved in or related to compiling, computing or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of such data. Without limiting the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing, or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages.

The MSCI Emerging Markets (Net) Index captures large and mid cap representation across 24 Emerging Markets (EM) countries. With 1,375 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country. * EM countries include Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Kuwait, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Saudi Arabia, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates.