Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
 
 
 
Blog Home
Bob Carey
Chief Market Strategist
Bio
X •  LinkedIn
 

  It’s Not Even Close!
Posted Under: International-Global
Supporting Image for Blog Post

 

View from the Observation Deck

  1. Like it or not, we now live in a globalized marketplace, and the pace of GDP growth is clearly more robust in the emerging market/developing nations (see chart).
  2. Advanced economies, also referred to as developed nations, include the U.S., Euro Area, Japan and others.
  3. From 2004-2011, the average GDP growth rate for emerging market/developing nations was 6.8%, compared to 1.6% for developed nations. That is a 4.25-to-1 advantage.
  4. From 1994-2003, the average GDP growth rate for emerging market/developing nations was 4.4%, compared to 2.8% for developed nations. Only a 1.57-to-1 advantage.
  5. In 2013, the International Monetary Fund (IMF) estimates that emerging market/developing nations will enjoy a 3.73-to-1 advantage.
  6. The IMF also estimates that emerging market/developing nations will account for 50% of global GDP for the first time ever in 2013.
  7. The old philosophy of U.S. investors allocating a 5% or 10% weighting to foreign stocks in an attempt to boost returns and temper risk is no longer adequate, in our opinion.
  8. We believe investors should consider allocating more capital to foreign markets, including emerging markets equities.
  9. From 2004-2011 (see point #3), the MSCI Emerging Markets Index posted an annualized gain of 12.1% (USD), compared to 3.6% for the S&P 500, according to Bloomberg.

This chart is for illustrative purposes only and not indicative of any actual investment. Investors cannot invest directly in an index. The S&P 500 is a capitalization-weighted index comprised of 500 stocks used to measure large-cap U.S. stock market performance. The MSCI Emerging Markets Index is a free float-adjusted, capitalization-weighted index designed to measure equity market performance in the global emerging markets.

To download a PDF of this post, click here.

Posted on Tuesday, January 8, 2013 @ 3:30 PM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
Search Posts
MARKET ANALYSIS
Market Commentary and Analysis
Market Commentary Video
Monthly Talking Points
Quarterly Newsletter
Market Observations
Subscribe To Receive Email
 


 PREVIOUS POSTS
Large-Caps Still Relatively Inexpensive Heading Into 2013
REITs Still Popular With Investors Heading Into 2013
Waiting Game Continues For Natural Gas Investors
Majority Of Top Performing Stock Indices Since Last Bear Market Have Growth Bias
Inflationary Pressure Has Abated In Some Key Countries
Being Paid for Taking Risk
Nerves Have Settled Some In Europe
Institutional And Retail Investors Still Do Not See Eye-To-Eye On the Markets
A Welcome Sight
Gaining Exposure To China’s Economy Without Investing In Its Stocks
Archive
Skip Navigation Links.
Expand 20242024
Expand 20232023
Expand 20222022
Expand 20212021
Expand 20202020
Expand 20192019
Expand 20182018
Expand 20172017
Expand 20162016
Expand 20152015
Expand 20142014
Expand 20132013
Expand 20122012
Expand 20112011

Search by Topic
Skip Navigation Links.

 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.