Emerging Markets Are Poised for Transformational Growth
From an investment perspective, 2018 proved to be a difficult year for emerging markets. Still the fact that the challenging situations in Argentina and Turkey remained isolated demonstrated how far emerging markets, and investors’ views of them, have evolved. All of these diverse countries can no longer be seen as a uniform bloc.

In our inaugural Emerging Markets Report, we examine some of the most exciting developments across emerging markets. It may come as a surprise to discover that in many industries, emerging markets are not following in the footsteps of developed countries, but rather leading the way.

With the additional advantages of having young populations and steadily rising ranks of middle-class consumers, emerging markets will likely be the engine that drives global economic growth for many decades. In the report, our investment teams and industry experts also offer their insights on how investors may be able to capitalize on all this potential.

Explore More in Each Section

Our equity and fixed-income investments, who spend considerable time in these markets, share their insights on where they believe the greatest opportunities lie. Our Innovation Index also demonstrates emerging markets may lead the next wave of technological breakthroughs.

1. The Big Picture

2. Regions in Depth

3. View from the Ground

4. Innovations in Emerging Markets

5. China Innovation

6. China's Tech Revolution

 

We Expect Better Performance from Emerging Markets in 2019

If 2017 was about synchronized global expansion and 2018 was about the divergence of U.S. growth and policy away from the rest of the world’s, then 2019 is likely to be about convergence as the United States slows and emerging markets stabilize. The barrage of external factors plaguing emerging markets—including higher U.S. interest rates, trade tensions, and a persistently strong U.S. dollar—will fade and the growth differentials around the world could swing back in favor of the emerging world.

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We See Better Conditions for Global Debt Markets in 2019

Financial markets hit a wall in the last quarter of 2018. Several shocks negatively affected market sentiment. The U.S. Federal Reserve (Fed) once again decided to hike interest rates, as was nearly universally expected.

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Reasons Not to Worry About a China Slowdown

Justin Leverenz, our director of Emerging Market Equities, shares his views on China’s economy.

Are you concerned about a slowdown in China?

The slowdown in China has been the main culprit for last year’s market panic, but against the backdrop of economic challenges and ongoing trade conflicts, China’s circumstances are largely manageable. Its transition towards a service-oriented, consumer economy is creating concerns because of the resulting growth deceleration, but it is a necessary step for achieving sustainable levels of growth.

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Emerging Markets Are a Hotbed of Innovation

Emerging markets are at the forefront of a global change in payment systems. Unencumbered by legacy systems or bricks-and-mortar banking networks, emerging markets can set the pace on electronic payments. A combination of young dynamic populations and governments’ desire to improve financial inclusion is seeing mobile and fintech innovators forge ahead across emerging markets.

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China Is Establishing the Future of Retail

Today, China is ground zero for the future of retail. It’s highly likely the West will have to learn from, and adopt, the experiments in retail that are happening today in the East.

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Confounding Stereotypes, China Has Become a Tech Powerhouse

China’s rise as a global technology powerhouse is broadly acknowledged, but the scale, nuance, and innovation are not always recognized. Indeed, many in the Western world remain fixated on a host of longstanding China stereotypes: that its tech industry is thriving only because of intellectual property infringement and strict internet regulation (the Great Firewall of China).

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