Slowing global growth provides new opportunities
The shift in the global growth will open up new investment opportunities however investors should be aware global growth is slowing faster than anticipated, according to PGIM, formerly Prudential Investment Management and the asset management arm of American life insurance company, Prudential Financial.
According to PGIM’s chief executive, David Hunt, the current slowdown in global growth was expected to be a long-term trend as developed markets were adjusting to lower productivity and ageing demographics.
Also, he said that the emerging markets would look particularly attractive to investors as some of the largest economies there were expecting to complete the transition to fully developed markets.
“Investors should really be re-evaluating the idea of ‘emerging’ markets. Increasingly, many of these economies have emerged as stable and now largely funded by domestic consumption,” he said.
“Our research indicates that ninety percent of growth in population and middle-class spending will come from emerging markets through 2030, and we see significant opportunities for investors in companies and sectors that will benefit from that growth.”
While Europe faced the long-term deflationary pressure of both aging demographics and technological advancement which might keep global rates low for a long time, China would most likely respond to the stimulus being put back into the economy and following this, would see a stronger second half.
“Globally the number of individuals over 65 is going to double over the next 25 years, and those over 80 will triple in the next 35 – this trend is particularly significant in markets like the US, Japan, Australia, and China, where older households are significantly outspending millennials in areas like healthcare, senior housing and ‘silver tech’,” Hunt added.
AUTHOR
Oksana Patron
Recommended for you
Wealth managers who lack expertise in alternatives could find themselves at risk of losing clients, according to iCapital, with a shift towards evergreen funds already at play in their asset allocations.
The development of semi-liquid private equity funds is providing an easier way for wealth managers to access the asset class, according to a panel, while firms are substantially improving their valuation processes.
Generation Development Group has appointed former Evidentia chief executive Peter Smith as an executive director.
Equity Trustees has paid three infringement notices issued by ASIC in which the corporate regulator alleged it made misleading statement about investments in a sustainable bond fund.
