Active ESG investing in emerging markets

Emerging markets are often seen as exotic, niche, risky parts of the market. While it’s certainly true that they are often more volatile versus their developed market peers; it’s also true that they offer potentially huge opportunities for long-term investors.

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Emerging markets are often seen as exotic, niche, risky parts of the market. While it’s certainly true that they are often more volatile versus their developed market peers; it’s also true that they offer potentially huge opportunities for long-term investors.

But how should one think about balancing the conflict between the perceived risks and obvious potential? Is there a way for a smart investor to navigate these markets and find a more stable path and sustainable return? Yes – by actively investing and keeping ESG issues at the forefront of their decision-making.

The growth story in emerging markets is well documented. Many of these markets have large and young populations, who are increasingly moving to cities and providing a catalyst for increased wealth creation. Brookings Institute estimates that the world’s middle class will swell by 2.4bn people to 5.4bn between 2015 and 2030 alone1 – and the vast majority of these new consumers will be in emerging markets. Increased wealth leads to increased consumption, and increased consumption translates into massive business opportunities.

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Risk Disclaimer

The value of investments and any income derived from them can go down as well as up as a result of market or currency movements and investors may not get back the original amount invested.Investing in emerging markets is generally considered to involve more risk than developed markets. Screening out sectors or companies may result in less diversification and hence more volatility in investment values.


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