Ashmore examines the long term investment case for emerging markets, arguing they remain structurally underallocated despite stronger growth, improving policy frameworks, and expanding capital markets. The paper highlights how global investors allocate less than 10% to the asset class versus benchmarks closer to 10%–35%, suggesting a persistent disconnect that could reshape flows.
Africa’s Public Markets: Issues For Investors
Ashmore
Gustavo Medeiros, Jan Dehn
Research
14 Pages
Key Takeaways
Underallocation Gap Persists: Developed market investors hold over $100 trillion in assets yet allocate under 10% to emerging markets versus benchmark weights reaching up to 35%.
Growth Differential Advantage: Emerging markets consistently deliver higher GDP growth, with industry AuM expanding at roughly 2x the pace of developed markets over recent years.
Performance Breadth Improving: Across asset classes, returns ranged from +1% to +13% in a year, with equities ex-China reaching +18%, highlighting diversification benefits.
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