Theopinionsexpressedinthispresentationarethoseofthespeaker.TheInternationalFoundation disclaimsresponsibilityforviewsexpressedandstatementsmadebytheprogramspeakers. Frontier and Emerging Markets James E. Meketa Managing Principal, Chairman Meketa Investment Group, Inc. Westwood, Massachusetts I13-1
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Frontier and Emerging Markets - IFEBP · Frontier and Emerging Markets • 50% of all new wealth will come from emerging and frontier markets • Conditions in emerging markets are
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The opinions expressed in this presentation are those of the speaker. The International Foundationdisclaims responsibility for views expressed and statements made by the program speakers.
Frontier and Emerging Markets
James E. MeketaManaging Principal, ChairmanMeketa Investment Group, Inc.Westwood, Massachusetts
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• What are emerging and frontier markets?• How do these markets differ from
developed markets?• What risks should trustees consider?• Which investment approach is better:
active or passive?• What about private equity and debt?
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Global Markets
• Developed• Emerging• Frontier
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Developed Markets
Population GDP
North America (U.S. and Canada)
350M $19T
Europe 500M $18T
Japan 127M $5T
Australia 24M $2T
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Characteristics of Developed Markets
• Stable governments• Efficient and transparent financial
institutions• Currencies managed by strong central
banks• High but stagnant per capita incomes
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Characteristics of Developed Markets
• Open to foreign ownership and investment• Ease of capital movement• High rates of consumption vs. production
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Global Significance of Developed Markets
• Population 14%• Share of Global GDP 50%
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50% of All Global Wealth Creation Takes Place in
Emerging and Frontier Markets
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Emerging Markets (the Big Four)
Population GDP
China 1,300M $11T
India 1,300M $2T
Brazil 200M $2T
Russia 142M $2T
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Other Emerging Market Countries
Mexico Peru
Indonesia Nigeria
Turkey South Africa
Saudi Arabia
South Korea
Malaysia
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Characteristics of Emerging Markets
• High rates of income growth (many now middle-class)
• Unstable governments• High levels of corruption, little
transparency• Volatile currencies managed by weak
central banks
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Characteristics of Emerging Markets
• Emphasis on production and exports over consumption
• Open to foreign ownership and investment (sometimes)
• Capital movement may be difficult or impossible
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Growth of Emerging Markets
2000 37% global GDP
2016 50% global GDP
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Benefits of Diversification
Developed Markets Emerging MarketsStability High Growth/ReturnsSafety High Growth/Returns
Liquidity High Growth/ReturnsInnovation High Growth/Returns