Emerging markets are radically diverse, but can offer some of the most attractive growth opportunities globally
Active managers seek to help you stay ahead of rapidly changing conditions and grasp opportunities earlier
You can access investment strategies with sustainability baked in
Opportunities look very different in China than they do in Chile. What many emerging markets do have in common is faster potential growth than developed economies – with the promise of capital market development and budding domestic savings markets. But the same potential that makes them attractive also makes them tricky to navigate without steady hands at the wheel.
Emerging markets represent more than 20% of the global fixed income opportunity set1 and approximately 10% of global equities2, and are deserving of an allocation within a professionally-oriented portfolio. Headquartered within these countries are some of the world leaders in sectors as diverse as internet commerce, green energy, food exporters, semiconductors, artificial intelligence, and electric vehicles, not to mention many national champions such as banks and utilities with dominant local market share.
Environmental, social, and governance (or ESG) considerations have never been more important. Active investors can get under the bonnet of specific companies to see who’s set up for sustainability. This is especially important, given a heavier presence of state-owned companies in emerging markets.
(1. Bank of America Securities; 2. MSCI Index)
Schroders operates one of the industry’s largest emerging markets franchises, with more than 130 investment professionals across the globe managing in excess of $90 billion (as of June 30, 2022). Our emerging markets footprint includes equities, fixed income and private markets, and we have operated in these markets for more than seven decades. These teams further integrate with corporate resources specializing in economic forecasting, commodities, big data, sustainability and, of course, specialists in a wide array of economic sectors. We feel actively meeting with emerging market companies while having access to such in-house specialists provides superior and deeper insights to merely running valuation screens off of a data set.
Our people also have a multitude of constantly updated ESG tools and analysis at their fingertips – essential for a strong emerging markets strategy.
“The same potential that makes emerging markets attractive also makes them tricky to navigate without steady hands at the wheel.”
Past performance is no guarantee of future performance. The value of investments and the income from them can go down as well as up, and you (or your clients) might not get back what you originally invested.
Emerging markets tend to be riskier than developed markets: they’re less stable politically, legally, and operationally. And exchange-rate changes can also make the value of any overseas investments rise or fall.