Three things developing markets can give you that developed markets can’t

Fsp Invest Team, 12 Apr. 2013

Tags: offshore investment, developing markets, investing offshore, fantastic dividends, offshore investment opportunities



“Offshore exposure is one of the most important parts of a stable, diversified portfolio. It helps you hedge your portfolio against rand weakness and provides you with new ways to tap into growth opportunities you can’t find here at home,” says Investment Expert, Leon Kok in The South African Investor. Read on to find out the three things developing markets can offer you that developed markets can’t.

Investing offshore isn’t just about making money. It’s about protecting your wealth too.

While Europe and America were previously known to be the traditional ‘safe haven’ developed markets, the thing most investors don’t realise is “developed markets aren’t as safe as they once were,” says Kok in The South African Investor.
 
“These days, crippling debt and rising unemployment have transformed these ‘safe’ offshore opportunities into risky markets with virtually zero growth,” adds Kok.
 
Have you considered what developing economies can offer?
 
Here’s are three benefits developing markets have over developed ones
 
1. Big spenders. “Bigger populations mean bigger middle-classes. And the more middle-class citizens you have, the more money you’ll see them spend. And that’s exactly what’s happening in developing economies. Come 2030, over 80% of the world’s purchasing power will come out of developing economies in Asia. When this happens, total middle-class spending will rise to $20 trillion,” says Kok.
 
2. Great value. “In a world where stocks and indices are looking increasingly expensive and are offering very little value, developing markets offer a great investment alternative. Stocks here are inexpensive, have low correlations with other asset classes and offer great long-term earnings growth,” Kok explains.
 
3. Fantastic dividends! Developing market stocks offer a great way to supplement income in your portfolio. According to a recent Citibank study, emerging and frontier market companies paid out more than $175 billion in dividends in 2011. And, over the last 12 years, the average developing market equity dividend yield was actually than equities in developed markets. 
 
Knowing what offshore investment opportunities are out there will enable you to make an informed decision about where to consider putting your money.
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