Emerging Markets - Aaron Skloff, AIF, CFA, MBA - CEO Skloff Financial Group

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Emerging Markets

Skloff Financial Group

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  • 1. Emerging Markets www.skloff.com
  • 2. Emerging Markets – GDP and Total Equity Market Growth 1999-2009 Sources: International Monetary Fund (IMF); Standard & Poor’s. As of December 31, 1999 and December 31, 2009. Population and GDP are from the World Economic Outlook Database, April 2010, published by the IMF. Market capitalizations are based on the individual country market capitalizations within the S&P/Citigroup Global BMI Index. BRIC stands for Brazil, Russia, India and China. www.skloff.com
  • 3. Emerging Markets – Economic Growth Much of the global economic growth in recent years has occurred in emerging markets, which account for 63% of the world’s population, and now 28% of its economic output. By 2019, emerging markets are expected to account for as much as 47% of global GDP. The outlook for growth in the BRIC (Brazil, Russia, India, and China) economies is particularly favorable. These four emerging countries have been booming, despite the global recession, posting five-year average annual growth rates of 8%, 11%, 9%, and 12%, respectively from 2005- 2009. Sources: International Monetary Fund, World Economic Database, April 2010. Economic Output based on GDP, EconomyWatch, International Monetary Fund, World Economic Output Database, April 2010, Wasatch Funds www.skloff.com
  • 4. GDP Growth of Emerging Markets 2004-2009 and Projected 2009-2014 Source: International Monetary Fund, World Economic Outlook Database, April 2010. Emerging and Developed markets as defined by the IMF www.skloff.com
  • 5. Trending Down – Annual Inflation in Large Emerging Markets 2000-2009 Source: International Monetary Fund, World Economic Outlook Database, April 2010 www.skloff.com
  • 6. Emerging Markets Stock Performance and Risk Emerging markets have outperformed the U.S. and developed countries over the 1-, 5-, 10-, and 20-year periods ended December 31, 2009. During the infamous lost decade of 2000 to 2009 when the S&P 500 was down -1.0%, emerging market stocks actually gained an annualized 10.0%. Source: Wasatch Funds www.skloff.com
  • 7. Emerging Markets Comparative Stock Performance and Risk Sources: As of 12/31/09. MSCI; Standard & Poor’s. Total returns. Standard deviation is a measure of volatility. Emerging markets represented by MSCI EM Index; Developed markets (non U.S.) by MSCI EAFE Index; U.S. markets by the S&P 500 Index. Past performance is not indicative of future returns www.skloff.com
  • 8. Emerging Markets Small Versus Mid and Large Cap Stock Performance Sources: As of 12/31/09 MSCI Emerging Market Small Caps represented by the MSCI EM Index, small cap segment; emerging market large cap and mid cap stocks represented by the MSCI EM Index, large cap and mid cap segments. www.skloff.com
  • 9. Emerging Markets Small Cap Stocks Have Lowest Valuations Sources: Standard & Poor’s; Thomson One; MSCI. Valuations are as of April 8, 2010. U.S. stocks are based on the S&P 500 Index. Developed markets (non U.S.) are based on the MSCI EAFE Index. Emerging markets are based on the MSCI Emerging Markets and MSCI Emerging Markets Small Cap indices, respectively. www.skloff.com