Embrace the growth potential of the world’s fastest-advancing economies.
From the bustling cities of China to the vibrant streets of Brazil, Asia and the emerging markets offer investors a world of untapped potential. Home to the vast majority of the world’s population, they’ve outpaced developed markets in terms of economic growth for years. And yet, they remain significantly underrepresented in many equity portfolios.
We believe it’s time for a rethink. Over the past decade, Asia and the emerging markets have undergone a significant transformation, with once underdeveloped countries having emerged as hubs for innovation, entrepreneurship, and growth. Whether it be clothing or smartphones – many of us consume products and services made within these countries on a daily basis.
As these economies continue to modernise, the question we ask is: can you afford not to invest in Asian and emerging markets?
Asia’s growth story is well known. It’s supported by strong structural trends, such as urbanisation, rising incomes, and the growth of the middle class. But Asian equity markets are far from homogenous, and this creates attractive opportunities for stock pickers.
Our insights and case studies can help you there.
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Whether you’re looking for an active or passive strategy, Invesco offers a breadth of strategies offering exposure to Asian and emerging market equities.
We have over 40 years’ experience of investing in Asia and emerging markets.
Our fund managers integrate ESG practices into their investment processes. We also have a dedicated global ESG Team to guide, support and inform all our work in this area.
Investing in Asia 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 Asia and emerging markets comes with the following risks you should look out for:
Political risk. Asia 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.
Investors can invest in Asia and emerging markets through a variety of means, including funds, exchange-traded funds (ETFs), and individual stocks.
The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.
Investors in less developed countries should be prepared to accept significantly large fluctuations in value.
Investment in certain securities listed in China can involve significant regulatory constraints that may affect liquidity and/or investment performance.
Data as at 30 April 2023 unless otherwise stated.
This is marketing material and not financial advice. It is not intended as a recommendation to buy or sell 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.
Views and opinions are based on current market conditions and are subject to change.
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