Emerging markets are back in focus. So far in 2019, investors reallocated $7.4 billion into US-listed emerging market (EM) equity ETFs1. At the same time, both developed market and US equity ETFs lost a combined $27.6 billion2. These asset flows are indicating a shift in investor preference that may be the beginning of a longer trend. However, we believe that simply moving into a general, broad-based emerging market ETF may not be the most optimal approach. Emerging market portfolios could benefit from greater exposure to the following specific growth drivers:
- urbanization
- middle-class consumption
- rapid adoption of mobile technology
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