Emerging Market Analysis

Markets obsessed over geopolitics and artificial intelligence last year, but the best performing stock markets didn’t come from safe-havens or the tech-heavy benchmarks. The “unexpected winners” came from frontier and small emerging markets, including each of the five best performing stock markets globally: Argentina (+114% in USD terms), Kenya (+79%), Pakistan (+79%), Sri Lanka (+70%), and Tanzania (+33%).   Why? The asset class has continued to offer diversification via uncorrelated returns, trading at historically low valuations, with lower volatility than mainstream emerging markets. Looking ahead, our key themes in 2025 for the overlooked frontier and small emerging markets are: -𝗥𝗲𝗳𝗼𝗿𝗺, 𝗥𝗲𝗰𝗼𝘃𝗲𝗿𝘆, & 𝗥𝗲𝘀𝘂𝗿𝗴𝗲𝗻𝗰𝗲 - Bold reforms are accelerating economic growth -𝗘𝘀𝗰𝗮𝗽𝗶𝗻𝗴 𝗖𝗵𝗶𝗻𝗮 & 𝘁𝗵𝗲 𝗧𝗮𝗿𝗶𝗳𝗳 𝗧𝗿𝗮𝗽 – Most of these economies (ex-Vietnam) aren’t in the crosshairs of tariffs and have low China exposure -𝗦𝘂𝗽𝗲𝗿𝗽𝗼𝘄𝗲𝗿𝘀 𝗖𝗹𝗮𝘀𝗵, 𝗠𝗶𝗱𝗱𝗹𝗲 𝗣𝗼𝘄𝗲𝗿𝘀 𝗥𝗶𝘀𝗲 – These countries are leveraging superpower rivalries to secure foreign capital for industrial expansion -𝗗𝗲𝗺𝗼𝗴𝗿𝗮𝗽𝗵𝗶𝗰𝘀 𝗗𝗲𝗳𝘆𝗶𝗻𝗴 𝘁𝗵𝗲 𝗚𝗿𝗲𝘆 𝗪𝗮𝘃𝗲 – Aging workforces plague most of the world, yet these countries are adding 130 million+ to their workforces over the next decade -𝗛𝗼𝗺𝗲𝗴𝗿𝗼𝘄𝗻 𝗛𝗲𝗿𝗼𝗲𝘀 – Local consumer brands outpacing global giants, growing faster and commanding higher market share https://lnkd.in/eurfh9BV

🌟 What’s Next for Emerging Markets in Insurance? Emerging markets are rewriting the playbook for growth in the insurance industry. 🌍 With expanding middle classes, increasing digital adoption, and heightened climate risks, these regions present immense opportunities—and unique challenges. Having worked across LatAm, APAC, and Europe, I’ve seen first-hand how tailored strategies can unlock the potential of these markets. But success demands adaptability and innovation. 💡 Key trends shaping the future of emerging markets: 📱 Digital-first solutions – Mobile adoption is skyrocketing, making mobile-first platforms essential for reaching underserved populations. 💵 Affordable products like microinsurance – Tailored, accessible offerings resonate deeply with diverse consumer needs. 🌱 Collaborations on sustainability – Public-private partnerships are becoming vital to address climate risks and build resilience. 📈 What’s ahead: Emerging markets will continue to drive growth, but insurers must prioritize cultural alignment, regulatory understanding, and agility to navigate these dynamic landscapes. 💬 Your perspective matters: What trends do you see shaping emerging markets? How is your organization adapting to the challenges and opportunities they present? Let’s exchange insights and strategies to build a more inclusive and innovative insurance industry. #EmergingMarkets #InsuranceInnovation #GlobalInsuranceTrends #Microinsurance #SustainableGrowth #InsuranceCareersMonth

Emerging markets are full of opportunities, but investing in the wrong business model can be a costly mistake. A startup that thrives in Silicon Valley may struggle in Lagos or Jakarta if it doesn’t account for local realities. The Danger of Imported Ideas Investors often make the mistake of backing companies that copy Western business models without adaptation. What works in developed markets may not work where: • Consumer behavior is different – Payment preferences, trust levels, and purchasing power vary widely. • Infrastructure is limited – Logistics, supply chains, and connectivity often require custom solutions. • Regulations are unique – Local governments may have vastly different policies compared to Western markets. What Savvy Investors Look For The best investment opportunities solve real, local problems using market-specific solutions. Some standout examples include: • FinTech built around mobile money – In regions where traditional banking is weak, mobile payments thrive. • Logistics tailored to infrastructure – Companies optimizing delivery networks for unreliable roads and supply chains. • Affordable healthcare innovations – Solutions designed to work in markets with limited medical access. The key question for investors: Is this a real business solving an actual problem, or just an imported idea? If a company isn’t designed for the local market, it won’t scale. #EmergingMarkets #InvestmentStrategy #MarketFit #BusinessGrowth #PatternCognition

The case for active EM 🐅 strategies…it’s those massive country return dispersions! I stumbled across an interesting research piece by Emerging Markets specialist Ashmore ("A new bull market cycle in EM equities") in which Gustavo Medeiros and Ben Underhill lay out the case for active management in EM equities, backed up by an independent study by Wilmington Trust: "Low-cost ETFs make economic sense for efficient markets with a survivorship bias, like the S&P 500. They make less sense for a benchmark composed of 2️⃣4️⃣ countries with more than 1️⃣3️⃣0️⃣0️⃣ constituent companies, with far lighter coverage from sell-side research. These characteristics mean active management has disproportionate importance in EM, whose companies lead the world in a wide range of industries yet sit in transformative economies with often immature institutions. The result is a high return opportunity for stock pickers alongside high market volatility, much of which can be attributed to top-down drivers. ⚠️ The average yearly performance dispersion between the highest and lowest country in the MSCI EM since 1997 was 111%, with a 63% to 264% range. ⚠️ Political dynamics driving policy changes explains much of this dispersion. Countries suffering from top-down governance deterioration tend to underperform. By contrast, countries implementing reforms to improve macro stability and boost economic freedom to the private sector tend to do well. Active managers that understand these dynamics can increase exposure to nations on the rise, while limiting holdings in politically turbulent countries. Several researchers have statistically proven that most EM active strategies outperform, partially due to this large country dispersion. 💡 A recent paper by Wilmington Trust, using data from December 1999 to December 2023, shows that in 7️⃣5️⃣% of 12-month rolling periods more than half the EM active managers beat their benchmark, a much more frequent outperformance than for managers of US small cap and international developed (6️⃣5️⃣%) and US large cap (3️⃣8️⃣%)." (+++Opinions are my own. Not investment advice. Do your own research.+++) #markets #investing #money #wealthmanagement Tap the bell 🔔 to subscribe to my profile & you'll be notified when I post. 💸

Emerging markets (EM) present a potential investment opportunity, but selectivity may be key. In our latest insights piece, I explore how near-term macro-economic shifts and long-term mega forces could set the stage for a new era of investing in emerging markets.   -Near-Term catalysts: The macro-economic environment could soon favor emerging markets. Anticipated rate cuts in the U.S. could weaken the dollar, potentially boosting EM assets. -Long-Term mega forces: mega forces such as youthful demographics and the rewiring of supply chains may benefit countries with younger working populations, like India and Mexico. -Portfolio Opportunities: We see potential for investors to increase their allocations to EMs in their portfolios, but investors should consider more granular exposures to harness the potential within the space.   Dive deeper into our views on emerging markets and how to approach the space: https://lnkd.in/ej7qBXEz 

👉 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗗𝗲𝘃𝗲𝗹𝗼𝗽𝗺𝗲𝗻𝘁 & 𝗗𝗶𝗴𝗶𝘁𝗮𝗹 👈 𝗘𝗺𝗲𝗿𝗴𝗶𝗻𝗴 𝗠𝗮𝗿𝗸𝗲𝘁𝘀: 𝗕𝗶𝗴 𝗢𝗽𝗽𝗼𝗿𝘁𝘂𝗻𝗶𝘁𝗶𝗲𝘀, 𝗕𝗶𝗴𝗴𝗲𝗿 𝗖𝗵𝗮𝗹𝗹𝗲𝗻𝗴𝗲𝘀 📝 Last week we talked about The Power of Data in Business Development: https://lnkd.in/dwuweJfh 📈 All tech companies are looking for growth and emerging economies can provide such opportunities. 🌍 Expanding into emerging markets like Asia, Africa, or South America is on every tech leader’s radar. The promise of untapped customer bases and rapid growth is hard to ignore - but success isn’t guaranteed. 👉 From my own experience of expanding tech businesses in Eastern Europe, Asia, and Africa, here are 3 key considerations for localizing successfully: 1️⃣ 𝗨𝗻𝗱𝗲𝗿𝘀𝘁𝗮𝗻𝗱𝗶𝗻𝗴 𝗟𝗼𝗰𝗮𝗹 𝗡𝗲𝗲𝗱𝘀: Emerging markets aren’t one-size-fits-all. What works in Europe or the US may not resonate elsewhere. Local research is crucial to adapt your product and messaging to real customer pain points. 2️⃣ 𝗡𝗮𝘃𝗶𝗴𝗮𝘁𝗶𝗻𝗴 𝗥𝗲𝗴𝘂𝗹𝗮𝘁𝗼𝗿𝘆 𝗛𝘂𝗿𝗱𝗹𝗲𝘀: From data privacy laws to taxation, each market comes with its own rules. Building compliance into your strategy early can save costly delays later. 3️⃣ 𝗕𝘂𝗶𝗹𝗱𝗶𝗻𝗴 𝘁𝗵𝗲 𝗥𝗶𝗴𝗵𝘁 𝗧𝗲𝗮𝗺𝘀: Success often hinges on hiring local talent who understand the culture, language, and buyer behavior. Partnering with trusted local advisors can accelerate market entry. 💡 The opportunity is significant, but companies that expand without a tailored approach risk losing credibility and resources. 🗨️ Over to you: Have you led or been part of a team expanding into emerging markets? What were your biggest lessons or challenges? Share your experience in the comments - we all learn from this exchange! #EmergingMarkets #GlobalExpansion #BusinessDevelopment #LocalizationStrategy #GrowthStrategy  _______ 𝘏𝘪, 𝘐 𝘢𝘮 𝘐𝘨𝘰𝘳. 𝘔𝘺 𝘤𝘰𝘳𝘦 𝘴𝘬𝘪𝘭𝘭𝘴 𝘢𝘳𝘦 𝘉𝘶𝘴𝘪𝘯𝘦𝘴𝘴 𝘋𝘦𝘷𝘦𝘭𝘰𝘱𝘮𝘦𝘯𝘵 & 𝘋𝘪𝘨𝘪𝘵𝘢𝘭. 𝘐𝘧 𝘺𝘰𝘶 𝘧𝘦𝘦𝘭 𝘺𝘰𝘶𝘳 𝘣𝘶𝘴𝘪𝘯𝘦𝘴𝘴 𝘪𝘴 𝘧𝘢𝘭𝘭𝘪𝘯𝘨 𝘣𝘦𝘩𝘪𝘯𝘥 𝘪𝘯 𝘵𝘩𝘪𝘴 𝘥𝘪𝘨𝘪𝘵𝘢𝘭-𝘧𝘪𝘳𝘴𝘵 𝘸𝘰𝘳𝘭𝘥 - 𝘨𝘦𝘵 𝘪𝘯 𝘵𝘰𝘶𝘤𝘩 𝘢𝘯𝘥 𝘭𝘦𝘵'𝘴 𝘴𝘰𝘭𝘷𝘦 𝘪𝘵 𝘵𝘰𝘨𝘦𝘵𝘩𝘦𝘳! 𝘌𝘯𝘫𝘰𝘺𝘦𝘥 𝘵𝘩𝘪𝘴 𝘱𝘰𝘴𝘵? 𝘓𝘪𝘬𝘦 👍, 𝘤𝘰𝘮𝘮𝘦𝘯𝘵 💬, 𝘰𝘳 𝘳𝘦𝘱𝘰𝘴𝘵 ♻️.