Exploding Populations in Emerging and Frontier Countries

• As the population in emerging economies grows, so may the spending and investment in these markets.

Emerging and Frontier Markets: A Substantial and Growing Share of the World’s Population

Source: United Nations, Department of Economic and Social Affairs, Population Division (2017). World Population Prospects: The 2019 Revision, DVD Edition.

Demographic Trends Favor Emerging Markets

• Emerging markets have a greater proportion of younger people entering prime working age.
• This reality may provide a strong demographic tailwind for emerging markets in the years to come.
• The proportion of younger people in emerging markets is better balanced to help support the aging segment of these societies.

Current Population
Age Group

Source: U.N. World Population Prospects 2019.

A Changing World

• Emerging economies, historically export driven, are expected to continue shifting toward consumption as per capita income rises and their middle class populations swell.

Number of Households and Share (%) of the Global Middle Class

Source: OECD, The Emerging Middle Class in Developing Countries, by Homi Kharas. January 2010.
Middle class is defined as households with annual per capita incomes between USD $3,500 and $35,000 in purchasing power parity terms. This range does not account for points at which a country’s discretionary spending increases internally. Forecasts are inherently limited and should not be relied upon as a guarantee of future results.

Emerging Markets’ Share of Middle Class Consumption Is Increasing Dramatically

• The expansion of the emerging markets consumer is a long-term, global secular trend—and may be one of the most powerful investment trends of the next several decade.
• Most of the incremental consumption growth is projected to come from China and India.
  

Share of Global Middle Class Consumption
2000–2030

Source: OECD, The Emerging Middle Class in Developing Countries, by Homi Kharas. January 2010.
Middle class is defined as households with annual per capita incomes between USD $3,500 and $35,000 in purchasing power parity terms. This range does not account for points at which a country’s discretionary spending increases internally. Forecasts are inherently limited and should not be relied upon as a guarantee of future results.

Emerging Markets Outpace Developed Markets

• GDP growth is driven by emerging markets; nine of the top 10 countries—based on expected GDP growth—are emerging markets.
• 15 of the 20 most swiftly expanding economies fall within emerging markets.

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The MSCI All Country World Index ex USA (MSCI ACWI ex USA) is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets.

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The MSCI ACWI ex USA Quality Index captures the performance of quality growth stocks across certain developed and emerging market countries by identifying stocks with high quality scores.

The MSCI ACWI ex USA Growth Index captures large and mid cap securities exhibiting overall growth style characteristics across certain developed and emerging market countries.

The MSCI ACWI ex USA Value Index captures large and mid cap securities exhibiting overall value style characteristics across certain developed and emerging market countries.

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