Emerging Markets Equities Investors Should Look to Small Caps to Benefit From Rise of Global Middle Class, According to The Bost
February 16 2010 - 7:37AM
PR Newswire (US)
BNY Mellon Investment Boutique Sees Opportunity to Tap into
Domestic Consumption BOSTON & LONDON, Feb. 16
/PRNewswire-FirstCall/ -- Investors should consider small cap
emerging markets stocks as a way to capitalize on the rapid growth
of the global middle class, according to a recent analysis by The
Boston Company Asset Management, LLC (TBCAM), part of BNY Mellon
Asset Management. "We believe this is a much better way to capture
domestic growth in emerging market economies than other more
popular tactics used today, such as investing in funds that are
benchmarked against the MSCI Emerging Markets Index or in global
multinational corporations," said Carolyn M. Kedersha, managing
director and senior portfolio manager at TBCAM. "It's important to
remember, however, that the emerging market small cap market is
inefficient and prone to periods of volatility that require an
active, stock-selection-based investment strategy." The MSCI
Emerging Markets Index is heavily weighted toward commodities and
export-driven companies and offers less exposure to local
consumer-driven demand, according to the TBCAM report. The report
also points out that multinational corporations have diversified
revenue streams and consequently are likely to reap a smaller
benefit than emerging market small cap companies from the rise of
domestic consumption in emerging markets. "Our assessment is that
the opportunity presented by the rise of this emerging global
middle class is significant," Kedersha said. "Emerging markets are
at the forefront of worldwide growth, with more than 80 percent of
the world's population advancing toward parity with the developed
world." Many emerging markets countries have been investing in
capital at higher rates than developed countries, the report notes.
These investments are expediting modernization, which includes
increased electricity generation and greater telephone access,
TBCAM said. Kedersha said, "These countries are likely to see a
commensurate rise in key elements of a developed economy such as a
solid middle class and consumer-driven expansion." Notes to
Editors: The Boston Company Asset Management, LLC, a BNY Mellon
Asset Management investment boutique, manages more than $34 billion
in assets for more than 450 clients worldwide. It provides
investment management services for corporate, public, mutual funds
and Taft-Hartley retirement plans, endowments and foundations. BNY
Mellon Asset Management is the umbrella organization for BNY
Mellon's affiliated investment management firms and global
distribution companies. BNY Mellon is the corporate brand of The
Bank of New York Mellon Corporation (NYSE:BK). BNY Mellon is a
global financial services company focused on helping clients manage
and service their financial assets, operating in 34 countries and
serving more than 100 markets. BNY Mellon is a leading provider of
financial services for institutions, corporations and
high-net-worth individuals, providing superior asset management and
wealth management, asset servicing, issuer services, clearing
services and treasury services through a worldwide client-focused
team. It has $22.3 trillion in assets under custody and
administration, $1.1 trillion in assets under management, services
$12.0 trillion in outstanding debt and processes global payments
averaging $1.6 trillion per day. Additional information is
available at http://www.bnymellon.com/. This press release
constitutes only current opinion of TBCAM, which is subject to
change. All information source BNY Mellon Asset Management as at
31/12/09. This press release is qualified for issuance in the UK
and US and is for information purposes only. It does not constitute
an offer or solicitation of securities or investment services or an
endorsement thereof in any jurisdiction or in any circumstance in
which such offer or solicitation is unlawful or not authorised.
This press release is issued by BNY Mellon Asset Management (US)
and BNY Mellon Asset Management International Limited (ex-US) to
members of the financial press and media and the information
contained herein should not be construed as investment advice. Past
performance is not a guide to future performance. Registered office
of BNY Mellon Asset Management International: The Bank of New York
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