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.