Chinese Healthcare: Growth Abounds
Portfolio manager Sara Moreno explains how structural changes in China’s healthcare market offer strong secular growth opportunities.
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.
Local stock market returns can differ dramatically from their respective economies due to external factors.
Most EM indexes are highly exposed to structurally challenged old economy stocks and less to growth companies.
Limited EM research coverage with consensus views not fully accounting for magnitude and duration of growth.
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 12/31/2020. 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 760 funds and 5 stars out of 631 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 313 funds, respectively. PGIM Jennison Emerging Markets Equity Opportunities Fund: The 3- and 5-year ratings are 5 stars out of 697 funds and 5 stars out of 597 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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1045735-00001-00 Ed 03/2021