Emerging Markets – Do We Need to Invest in Them?

Emerging markets (“EM”) investments have significantly contributed to investor portfolio returns over the years.

They have constantly been talked about as the place to invest going forward. This has not been so for the last 3-4 years, as deglobalisation comes back into favour (thanks in part to Trump), tariffs are starting to have an impact, and so are regional conflicts.

What are emerging markets?

Developing countries with rapid industrialisation, increasing urbanisation, and improving infrastructure are typically categorised as emerging markets. The largest emerging markets are China, Taiwan, India, South Korea, and Brazil.

Some of the largest leading companies are based in emerging markets, notably in the Information Technology and Consumer Discretionary sectors- names like Taiwan Semiconductor Manufacturing Company (TSMC), Tencent Holdings, Alibaba, and Samsung Electronics.

Why are we investing in emerging markets going forward?

SBS Wealth has always had an allocation to EM, although this has been lower for the last few years. In 2025 we are starting to increase this as we see opportunities for the region. There is growing demand for the “South-South” trade, southern developing regions with similar political, social and economic histories. There is also China’s “Belt and Road” initiative (global infrastructure development), India’s “Act East” initiative (government led effort to cultivate extensive economic and strategic relations with Southeast Asian countries) and multiple BRICS (Brazil, Russia, India, China, South Korea) forums.

A lot of the AI development is also sourced from EM countries, notably the semiconductor chips from TSMC.

At SBS Wealth we invest through global industry expert Schroder, who have analysts on the ground evaluating the company financials, current and future strengths and actively selecting a portfolio of stocks.

What we’re reading: Do emerging markets need developed markets? - InvestorDaily | InvestorDaily