Further Support for Emerging Market Equities

May 22, 2013

This week’s Chart of the Week examines historical and projected contributions to total world Gross Domestic Product (GDP) based on Purchasing Power Parity (PPP) at exchange rates prevalent in the United States. The International Monetary Fund (IMF) in its April 2013 release of the World Economic Outlook report shows the share of total world GDP between advanced economies and emerging and developing economies from 1980 through 2018. As seen in the above graph, advanced economies’ share of world GDP has steadily declined since the early 1990’s with emerging and developing economies comprising an increasingly larger percentage of world GDP over this time.

2013 is the first year that emerging and developing economies are expected to contribute a larger share of total world GDP than advanced economies. In addition, emerging market countries typically have lower levels of government debt and more favorable demographics than their advanced economy counterparts. While emerging market stocks have underperformed in recent years compared to other equity markets, their growing contribution to world GDP offers a compelling case for continued allocations to this asset class.

 

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

Related Content

04.16.2024

The Banks’ Real Estate Problem

First quarter earnings season is getting started, with the largest banks reporting first. In the wake of last year’s regional…

04.11.2024

First to Cut: The Fed or the ECB?

Based on implied probabilities derived from options markets, investors are currently forecasting an 82% chance that the European Central Bank…

04.01.2024

Sweet and High Up

Chocolate eggs and bunnies may have appeared more expensive to shoppers this Easter weekend, as the price of cocoa futures…

03.27.2024

The Crystal Ball Has Clouded

Last month, Marquette published a Chart of the Week that highlighted the aberrational length of the current…

03.21.2024

The Dynamic Duo

In 2023, investors were stunned by the robust performance of seven prominent mega-cap stocks deemed the “Magnificent Seven.” Largely beneficiaries…

03.12.2024

The DPI Lie?

There are multiple ways to gauge how private markets managers are performing, such as benchmarking returns relative to their peers…

More articles

Subscribe to Research Email Alerts

Research Email Alert Subscription

Research alerts keep you updated on our latest research publications. Simply enter your contact information, choose the research alerts you would like to receive and click Subscribe. Alerts will be sent as research is published.

We respect your privacy. We will never share or sell your information.

Thank You

We appreciate your interest in Marquette Associates.

If you have questions or need further information, please contact us directly and we will respond to your inquiry within 24 hours.

Contact Us >