We look at capturing growth and income investment opportunities across Asia and emerging markets, through our process of bottom-up analysis and a focus on valuation.
Asia and emerging markets offer compelling opportunities related to the region’s rapid technological innovation, expanding consumer bases, and abundant natural resources. These dynamic markets combine secular growth drivers with improving liquidity, offering disciplined investors a differentiated source of long-term value and diversification.
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.
Investing in Asian and emerging markets comes with the following risks you should look out for:
Political risk. Asian and emerging markets may have unstable or volatile governments. Adverse government actions and decisions, as well as political instability or unrest can impact investments.
Regulatory risk. Changes in laws and regulations can impact investments.
Currency risk. The foreign exchange rate between emerging and developed market currencies and can be volatile. If the emerging market currency experiences a loss in value, this can impact returns.
Liquidity risk. Emerging markets are generally less liquid than developed markets.
You can invest in Asian and emerging markets through a variety of means, including funds, exchange-traded funds (ETFs), and individual stocks.
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