Emerging Innovation: Three Trends for Growth Stock Investors
Emerging market (EM) countries have long relied on commodity cycles and low-cost manufacturing for export-driven growth. But a wave of corporate innovation is changing that, helping to drive growth from within and providing equity investors with higher quality, sustainable opportunities across many countries.
Investors in EM stocks are facing challenges with countries like India and Brazil still struggling to contain COVID-19. The MSCI Emerging Markets Index rose by 6.5% this year through June 30 in US-dollar terms, trailing the MSCI World Index s 12.2%. Growth stock returns were weaker. But as the earnings outlook improves, we believe that three powerful long-term trends, driven by innovation, are creating growth opportunities that will persist through the pandemic and beyond.