Why Emerging Markets?

Driven by strong fundamentals, the BRIC (Brazil, Russia, India and China) nations are saturated with enormous foreign exchange reserves and stable well capitalized banking systems which will guide their economies through the current global economic storm created by the developed economies.

What are the key drivers of Emerging Market growth?

• Emerging Markets are countries which have low Gross Domestic Product (GDP) per capita. Historically after a country crosses $1000 in GDP per capita, like India and China have done, it's growth accelerates, a phenomenon witnessed in the case of the US and Japan, and more recently with Hong Kong and Taiwan.
  
  
• Emerging Market countries represent over 80% of the worlds populations and produce about 20% of the worlds good and services.
  
  
• The middle class in the four BRIC nations are expected to grow to 800 million people by 2015, surpassing the total combined population of the US, Western Europe and Japan.
  
  
• The growing middle class of the Emerging Market countries are creating a high domestic demand for consumer products and banking services.
  
  
• It is projected that the sole global economic growth in 2009 will come from Emerging Markets. The forecast for 2010 is that the advanced economies will return to positive growth, at a modest rate of 1.2%, while the BRIC countries will expand at a pace of 7.2% as markets rebound.
  
  
• The Emerging Market economies have allocated significant resources to infrastructure development spending, which in turn creates considerable employment opportunities. It is forecasted that there will be a total of US$21.7 trillion in infrastructure spending in emerging markets over the next decade, with Asia representing 67% of this total.
  
  
• Demographics play a critical role in the growth of the Emerging Market countries. Currently 31% of the Emerging Market population consists of individuals under the age of 15, providing a growing and able bodied workforce. This is in contrast to the aging population of the developed nations, with a mere 18% under the age 15. Emerging Markets will be the key driver of Global economic growth in 2009 and are well-positioned to lead the Global economy out of the current credit crisis.

Sources: FT.com (Jim O'Neill), Morgan Stanley, RUSSOFT & Outsourcing Russia, Goldman Sachs, United Nations, Population Reference Bureau, IMF World Economic Outlook