Monday, November 4, 2013

Buying Emerging Markets By Not Buying Emerging Markets!

Quick note re Emerging Market opportunities:

For some time, our exposure in Emerging Markets has been positioned 'indirectly', by owning developed country companies that have a significant portion of their business in emerging countries.  The following chart from McKinsey shows that currently, an overwhelming majority of the world's largest companies are in the developed world, though over time, that is likely to change, and according to McKinsey, the EM-based companies could reach close to 1/2 of the Fortune Global 500 by 2025!  In the meantime, for a variety of reasons including corporate governance, transparency, visibility, and geopolitical risk management, the 'indirect' ownership approach is likely to be very useful especially at times of perceived overvaluation of EM country stock markets.
More on this theme over time.....

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(Please note: This article is solely meant to be thought provoking and is not in any way meant to be personal investment advice. Each investor is obligated to opine and decide for themselves as to the appropriateness of anything said in this article to their unique financial profile, risk tolerances and portfolio goals).
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Additional Disclaimer: currently long many stocks/ETFs.  Positions may change at any time without notice.

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