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Why the future of investing belongs to emerging markets

Emerging markets are on the rise as a direct result of pro-business reforms and ground-breaking shifts in their economic models. India, a true bright spot in the emerging markets, is transforming from an agro-economy to a manufacturing and services hub, while China is transitioning from being the world’s leading provider of exports, to a consumption-driven economy that craves high-quality goods. Latin America presents a compelling ‘value story’ and attractive investment opportunities with strong risk-reward profiles.

The emerging market bond universe has grown exponentially from US$5 trillion to over US$16 trillion over the past 10 years.¹ In a world where most developed market government bonds sport near-zero or negative yields, income-seeking investors can pivot towards emerging market bonds, with the knowledge that they are generating higher yields from creditworthy, governments and corporations.

We believe there are three reasons why the future of investing belongs to emerging markets:

  • Demographic Dividend
  • Strong Economic Fundamentals
  • Attractive Capital Markets
¹ Bank of America Merrill Lynch Research data, as of May 31, 2015.

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