Excel Funds Management Inc.

Emerging Markets

Response to – Who are tomorrow’s consumers?

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Many analysts expect EM to increase growth over the next decade. In the first half of the year China’s growth rate was 8.1% and has since dropped to 7.6% (no cause for concern). Two thirds of the decline can be attributed to slower investment because of world events and not slower consumption. One reason why China’s consumption hasn’t increased as fast as projected is because of the number of households with disposable income.  1.6 million of China’s households have disposable income of 150K compared to Japan which has 4.6 million and the US which has 19.2 million. This means that developed countries still have the advantage in terms of disposable income to purchase luxury goods. As more of China’s population shift into the middle class consumption will grow. According to Mr. Kharas’s projections Asia will account for 2/3 of the world’s middle class by 2030.

 

Be fearful when others are greedy and to be greedy only when others are fearful” – Warren Buffet. Today everyone is fearful because of how markets performed over the last 5 years. This is a chance for our clients to participate in a growth opportunity not seen in decades. As the middle class increases in EM they will increase their consumption. Many will be buying a car, TV and house for the first time. It’s important for our clients to understand the consumption story and to participate in the growth opportunity today.

 

Sanyal, S. (2012, August 11). Who are tomorrow’s consumers? . The Globe and Mail. Retrieved August 13 2012, from http://www.theglobeandmail.com/commentary/columnists/who-are-tomorrows-consumers/article4476196/

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Author: Excel Funds Management

We Are Leaders. Our Focus is Undivided. Excel Funds is Canada’s specialist in Emerging Market investment opportunities. We pioneered Emerging Market mutual fund design and distribution in Canada. Our focus is undivided – Emerging Markets is all we do. Our Mission Is To Offer Canadians True Global Access By offering Canadians access to rapid growth markets, Excel Funds provides truly global and diverse investment value. Our clients want consistent, responsible and intelligent solutions – we will never stop being challenged and deliver on client expectations. We Listen. We Are Determined To Deliver. Our clients want to understand better. Excel Funds is the only company dedicated to providing investors with actively managed, best-in-class Portfolio Managers based in regional markets. In order to deliver deeper understanding, we are not removed from unique cultural, political and economic experiences. We Initiate. We Create. Investors benefit from strong, sustainable growth. To create wealth for our clients we will: • Offer globally diverse opportunities to capture shifts in world economies • Not resist change and continually lead in Emerging Markets global growth • Engage world class institutional managers for retail investors We Are Passionate. We Will Never Stop Innovating. True leadership is enabling and seeks a positive outcome for all invested. We will not rest on past success, and continue to provide clients with: • Innovative fund structures • Canada’s largest & most comprehensive Emerging Markets products • The best institutional level Portfolio Managers • World class on-the-ground active managers • A singular focus on Emerging Markets, the driver of global growth

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