With more than 50 per cent of the global population under 30 living in emerging market countries, the emerging market story is expected to remain a compelling investment opportunity for years to come.

Strong growth in working-age populations, urbanisation and a rising middle class are expected to underpin one of the most important megatrends of the decade. We look at what will drive the emerging market story over the next 10 to 20 years, and which areas of the market are likely to provide the most compelling investment opportunities.

Key points are:

  • Underpinning the economic growth story for emerging markets is the ‘demographic dividend’. The United Nations predicts that the world’s population will increase by 41 per cent by 2050, with nearly all this growth in developing countries.
  • Emerging market economies are transforming from commodity-intensive, domestic-infrastructure and export-manufacturing economies to services-based economies.
  • As data becomes more globalised, tech-savvy millennials are expected to open up investment opportunties not only across traditional and online retail, but also in payment gateways, healthcare, services, education and gaming.
  • Significantly, Indian purchasing power lags its emerging market peers. India’s very high smartphone penetration and availability of mobile broadband infrastructure makes it a very compelling emerging market consumption opportunity.
  • We prefer active management in emerging markets, where experienced managers can address the inefficiencies that often exist in less researched markets.