Commentary: actively investing in emerging markets

Why and how we do this for our clients

Written by Nitin Manohar
February 15, 2018

Our team works with high-achieving executives, medical professionals, business owners and families to reach their goals. This often involves comprehensive financial planning, business succession and retirement planning, plus additional support from our extended team of specialists at Scotia Wealth Management. A lot goes into one financial plan to obtain the desired results, and every element is uniquely important. That said, one part of your wealth management plan that cannot be ignored is something we’ve long been passionate about: investment management that preserves and grows your wealth.

Emerging markets have long played a key role in the global economy while creating opportunity for investors. There are many reasons to actively invest in emerging markets (often referred to as EM), including elements of risk management, growth potential and performance numbers. It’s an important asset class that cannot and should not be ignored. Today, we’ll examine several elements of EM investing, including why and how we do this for our clients.

Why we believe in EM investments

Our years of experience have given us every reason to include EM investments in client portfolios. In addition to proven performance, there are additional factors – namely, the upward trend in middle-class economic growth. Income growth in this demographic leads to spending (look at China, for example) and current data suggests that EM growth will continue to outpace that of developed economies1. Consumer spending habits are generally consistent and reliable, with a direct (and beneficial) relation to consumer bias. Put simply, as middle class individuals and families create more disposable income, they are likely to spend it on middle-class luxuries such as vacations, technology, entertainment and even enhanced education for themselves and their children2. Our willingness as a society to spend money in these areas provides great support to emerging markets, making for some exceptional investment opportunities. Over the long-term, we have reason to believe that EMs could outperform many global markets.

Your success is our success

As we strive for exceptionality in our wealth management practice, we will continue to provide information and resources to our clients. If you have questions about our approach to EM investments or your wealth management strategy, please reach out to our team. As always, we’d be pleased to hear from you.