Three key long-term drivers for emerging markets

EMs

Although, in the near-term, economic growth and earnings are likely to continue to surprise and disappoint, expectations for emerging markets (EMs) are too low versus estimates of their long-term earnings power.

Here are three key reasons why I believe the long-term case for EMs remains strong: 1. The EMs’ share of global GDP will rise meaningfully over time The International Monetary Fund (IMF) already estimates EM economies are close to producing 40% of global GDP. This figure has risen from only a fifth of global GDP in 2000, and is projected to reach 49% by 2020, and almost 60% by 2030. If this growth in economic output translates into superior corporate earnings growth, this will create meaningful investible gains for investors. Acquiring such growth at attractive valuations can then a...