A Case for Emerging Small Cap


The staggering growth of emerging market economies has led to a new dynamic in global consumerism. Increasing wealth and modernization across these markets is creating a new global middle class, which will likely become tomorrow’s most important consumer base. Favorable long-term demographics, low product- penetration levels, and greater purchasing power all point to current and future growth in domestic demand. While emerging market equities are able to capture much of this economic expansion, traditional indices have a bias toward the natural resources sector and global exporters. In order to access this new middle class, investors must look beyond the more popular emerging market indices or global multinational corporations and consider smaller, more domestic-driven companies. Emerging markets small cap equity provides another option for investors looking to capitalize on the promising trends derived from a new consumer population.

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