Asian Markets

A bright future for Asian markets

During the bull run of 2003 to 2007, Asian equity markets provided investors with the opportunity to achieve unprecedented levels of growth, with Asian markets exceeding the growth rates of US markets by as much as 140%!

However, extremely volatile market conditions from late 2007 to early 2009 highlighted the other side of the coin – the risks associated with Asian investment. The MSCI Asia Index (ex-Japan) dropped by over 60% in 2008, more than both the MSCI World Index and the Australian sharemarket index.

Are these markets still a good investment?

Many fast growing Asian economies are undergoing profound structural shifts. Rapid urbanisation means millions of people are moving from rural areas to urban cities and towns in search of a more comfortable life. With urbanisation come better education, higher incomes, and higher discretionary spending.

Consider these startling facts:

  • The Asian region supports half the world’s population;
  • China is expected to be the world’s largest economy by 2040, with India set to take second place;
  • China’s economy expanded by 11.9% in the March quarter 2010;
  • Since the early 1990’s Asia’s economic size has doubled relative to the US;
  • The Asian middle income population is expected to grow by 850 million over the next 10 years, leading to a massive rise in consumer demand;
  • 221 Chinese cities will have a population greater than 1 million by the year 2025;
  • Economic growth in Asia is expected to be double the rate of the European Union or the US;
  • Many Asian countries including Hong Kong, Singapore, Thailand, Taiwan, and the Philippines have massive savings and foreign exchange reserves available for spending and investment;

These facts are compelling, but investing in Asia brings extra political, regulatory, and currency risks compared with developed nations. So make sure you do your homework and only invest with the top investment managers in the region. They might be slightly more conservative, but you’ll appreciate that lower risk in volatile times. And in good times, they’ll be much better placed to take advantage of the local market conditions.

Invest in the New Industrial Revolution

The exploding manufacturing capabilities of the Asian markets is the beginning of a New Industrial Revolution happening in Asia right now. Access exposure to that industrial transformation through a fund like Excela's Emergent Fund.

Learn about Emergent




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