Lightweights: Popular Benchmarks Low on Growth Potential
Jennison Associates explains how passive emerging markets equity exposure leads to missing out on the most dynamic, fastest-growing companies in the region.
A new set of secular drivers are propelling emerging markets (EM) forward. However, most investors aren’t capturing the underlying themes with their current EM exposures. Jennison Associates examines what investors might be missing, and how they may benefit from unfolding trends and reap the rewards of this dynamic asset class.
EMs have large and burgeoning younger middle-class populations that rely heavily on technology in their daily lives. The massive EM millennial group is helping to drive lifestyle changes and urbanization. These shifts are buoying many consumer-oriented companies and driving demand in areas such as educational and financial services, healthcare, leisure, and branded and luxury goods.
Challenged with less developed infrastructure, many EM companies are leapfrogging innovation of developed markets to get ahead of world standards. As strong adopters of smartphones, e-commerce, and digital payments, many EM companies are embracing new platforms, leveraging technology to grow sales and create new demand, and developing innovative ways to scale customer transactions.
Despite a plethora of secular growth opportunities, many investors have been disappointed by lackluster results from their emerging markets allocations in recent years. Below are three reasons for the disconnect.
Jennison Associates, our fundamental equity manager, has a 50+ year track record of identifying game-changing trends and investing early to capitalize on the fast growth potential of future market leaders in their nascent stages. With some of the industry’s highest accolades, Jennison manages three concentrated growth funds that can help boost your EM exposure to future industry disruptors.
Morningstar as of 6/30/2021. The overall rating is based on the Fund’s 3- and 5-year star rating for Z shares. Morningstar measures risk-adjusted returns. PGIM Jennison Global Opportunities Fund: The 3- and 5-year ratings are 5 stars out of 307 funds and 5 stars out of 263 funds, respectively. PGIM Jennison International Opportunities Fund: The 3- and 5-year ratings are 5 stars out of 384 funds and 5 stars out of 323 funds, respectively. PGIM Jennison Emerging Markets Equity Opportunities Fund: The 3- and 5-year ratings are 5 stars out of 701 funds and 5 stars out of 602 funds, respectively. Past performance is no guarantee of future performance.
Jennison Associates provides insights on recent structural changes in China offering long-term investors strong growth opportunities.
Three major shifts for investors as retail adapts to a younger, richer, tech-savvy global consumer.
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1045726-00003-00 Ed 09/2021