The most attractive emerging markets growth opportunities we see today are in companies that benefit from long-duration, secular growth trends. Establishing exposure to these companies through index-like allocations can be futile, however, as many mainstream emerging markets benchmarks tend to hold old-economy companies
The highest-growth emerging markets companies historically have been innovators and disruptors that re-imagined the way people communicate, work, shop, and play. They have also profited from long-term growth catalysts, such as the growing middle class. However, many of these companies are underrepresented in popular emerging markets benchmarks. In fact, many emerging markets companies are the growth leaders of yesteryear—from financials, energy, materials, industrials, telecom, and consumer cyclicals.