Why small caps are your EM solution

Alex Ingham of Aviva Investors says emerging market small caps are well placed to capture the rise of EM consumers.

Consumption growth in emerging economies is stronger than in the developed world and is set to grow faster than ever before. Already led by China, households in the four biggest emerging economies – Brazil, Russia, India and China – with discretionary spending over $10,000 are larger in number than in the US. According to Morgan Stanley estimates, by 2013 they are expected to exceed their counterparts in the eurozone and by 2020, are likely to be far larger than both the US and eurozone combined. Even so, relative to a country’s gross domestic product (GDP), consumption remains lower ...