Dynamic Growth Stories Where Nobody is Looking

Dynamic Growth Stories in Latin America & EEMEA

Latin America and EEMEA (Emerging Europe, Middle East, and Africa) have grown into attractive but overlooked regions of Emerging Markets (EM). The average global institutional equity investor has a 5% allocation to Emerging Markets[1]. With Asia currently representing 80% of the MSCI EM Index[2], the average global investor only holds a 1% allocation to Latin America, Emerging Europe, the Middle East, and Africa combined. This leads us to believe that most investor attention remains on Asian markets, potentially creating inefficiencies and opportunities in Latin America and EEMEA. Simultaneously, these are the regions seeing some of the largest structural leaps across the emerging world.

 


[1] EPFR Global, Thomson Reuters Datastream, HSBC calculations, data as of 11/30/20.

[2] Bloomberg, data as of 12/31/20.

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Investment Considerations — There can be no guarantee that any strategy (risk management or otherwise) will be successful. All investing involves risk, including the potential of loss of principal.

Emerging Markets Risk — The risks of foreign investments are typically greater in less developed countries, which are sometimes referred to as emerging markets. For example, political, legal and economic structures in these country may be changing rapidly, which can cause instability and greater risk of loss. These countries are also more likely to experience higher levels of inflation, deflation or currency devaluation, which could hurt their economies and securities markets. For these and other reasons, investments in emerging markets are often considered speculative. Similarly, investors are also subject to foreign securities risks including, but not limited to, the fact that foreign investments may be subject to different and in some circumstances less stringent regulatory and disclosure standards than U.S. investments.