We believe the opportunities for investors are likely be plentiful in developing markets. Europe faces numerous challenges, while valuations in the US market currently seem, in our view, to ignore the challenges ahead.
However, valuations across emerging markets have become inordinately cheap and we are excited to uncover well-run companies even in the most stressed economies.
Weakness in the US dollar
Developing markets currencies are competitively priced and historically developing markets stock markets have tended to perform better against a backdrop of a weakening US dollar.
The right cocktail
An environment of low interest rates and a weakening US dollar are likely to boost foreign capital flows and private investments towards non-US assets. That bodes well for EM*, which we think offer greater potential for growth as (non-China) developing countries by and large are constrained by insufficient domestic savings to fund investments necessary to lift structural growth.
Although the fund doesn't use a benchmark, it is interesting to note that China now accounts for more than 40% of the MSCI EM index. With more unicorns (privately held innovative start-ups valued at more than US$1 billion) going public, we believe that China’s share will continue to grow in size and importance
With the massive changes in accessibility of Chinese companies (and relatively pedestrian real estate prices), we anticipate a significant shift in asset allocation towards equities, analogous to what we witnessed in the US in the 1980-90s when mutual funds democratised equity investing. And remember China has the largest savings pool in the world.
Seeking to achieve our goals through active portfolio management
The team employs a bottom-up approach that seeks to identify exceptional companies that benefit from structural growth tailwinds, have sustainable competitive advantages and real options that manifest over time. For professional investors only.Find out more
* EM = Emerging Markets
** Source: Invesco. As at 31.01.2021
The value of investments, and any income from them, will fluctuate. This may partly be the result of changes in exchange rates. Investors may not get back the full amount invested.
As a large portion of the fund is invested in less developed countries, you should be prepared to accept significantly large fluctuations in the value of the fund.
The fund may invest in certain securities listed in China which can involve significant regulatory constraints that may affect the liquidity and/or the investment performance of the fund.
The fund invests in a limited number of holdings and is less diversified. This may result in large fluctuations in the value of the fund.
This marketing document is exclusively for investors in Luxembourg. Data as at 31.01.2021, unless otherwise stated. This document is marketing material and is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell securities. By accepting this material, you consent to communicate with us in English, unless you inform us otherwise.
Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. For more information on our funds, please refer to the most up to date relevant fund and share class-specific Key Investor Information Documents, the latest Annual or Interim Reports and the latest Prospectus, and constituent documents. Subscriptions of shares are only accepted on the basis of the most up to date legal offering documents. These documents are available from our website www.invesco.eu and are without charge. The Key Investor Documents are available in local language. This marketing document is not an invitation to subscribe for shares in the fund and is by way of information only, it should not be considered financial advice.This does not constitute an offer or solicitation by anyone in any jurisdiction in which such an offer is not authorised or to any person to whom it is unlawful to make such an offer or solicitation. Persons interested in acquiring the fund should inform themselves as to (i) the legal requirements in the countries of their nationality, residence, ordinary residence or domicile; (ii) any foreign exchange controls and (iii) any relevant tax consequences. As with all investments, there are associated risks. This document is by way of information only. Asset management services are provided by Invesco in accordance with appropriate local legislation and regulations. The fund is available only in jurisdictions where its promotion and sale is permitted. Not all share classes of this fund may be available for public sale in all jurisdictions and not all share classes are the same nor do they necessarily suit every investor. Fee structure and minimum investment levels may vary dependent on share class chosen. Please check the most recent version of the fund prospectus in relation to the criteria for the individual share classes and contact your local Invesco office for full details of the fund registration status in your jurisdiction. This fund is domiciled in Luxembourg. This fund is part of Invesco Funds SICAV. This UCITS-fund is registered in Luxembourg at the Comission de Surveillance du Secteur Financier.