Investing in Asian and emerging markets can offer several important benefits to investors:
High growth potential. These markets are often characterised by lower per capita income levels and less developed economic infrastructure, which can create significant room for growth and development.
Valuation opportunities. Many Asian and emerging market equities have attractive valuations because they’re often trading at lower valuation rations than developed market equities.
Diversification potential. Asian and emerging market equities have a low correlation to developed market equities, which means that they tend to behave differently in response to market and economic events. Therefore, a combination of both in a portfolio could potentially reduce the portfolio’s risk.