Emerging Versus Developed Markets

Well it’s ChartBrief number 100 and what better way to mark the milestone with a look at a milestone in the emergence of emerging markets.  We first showed this chart last year – the % share of global GDP attributable to emerging and developing economies.  The surprising fact (to some) is that on this measure emerging markets have already become the dominant economic force.  This has considerable implications already and going forward on a range of issues from the level and volatility of global growth, geopolitics and the world order, and of course in investment markets.

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Asian Central Banks Vulnerable As Rates Rise

In this note we extend the analysis to include equity markets.  While emerging and developing economies account for about a 60% share of world output on the IMF measure, looking at global equity market capitalization data, EM represents about 15%.  At the peak of the EM/Commodity boom it was around 20%, but even then it's a long way off the global GDP share.  This will most likely shift in time as growth, capital market development, reforms, and governance progresses in the emerging economies, and is a trend that asset allocators should be across.
According to IMF data, emerging and developing economies have become the dominant force in the global economy. There are a number of important implications arising from this.

Looking at equity market capitalization it's still quite a different story, albeit the trend is up and while there will be cycles around it, the direction of the trend is likely to continue.

Mangrove Partners Narrowly Avoids “Extinction-Level Event”

Nathaniel August's Mangrove Partners is having a rough 2020. According to a copy of the hedge fund's August update, a copy of which ValueWalk has been able to review, for the year to August 5, Mangrove Funds have returned -38%. Over the trailing 12-month period, the funds returned -44%. The S&P 500 produced a positive Read More


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Topdown Charts: "chart driven macro insights" Based in Queenstown, New Zealand, Topdown Charts brings you independent research and analysis on global macro themes and trends. Topdown Charts covers multiple economies, markets, and asset classes with a distinct chart-driven focus. We are not bound by technical or fundamental dogma, and instead look to leverage any relevant factor to capture the theme. As such, here you will find some posts that are purely technical strategy, some that just cover economics and data, and some posts that use multiple inputs to tell the story and identify the opportunities. Callum Thomas Head of Research Callum is the founder of Topdown Charts. He previously worked in investment strategy and asset allocation at AMP Capital in the Multi-Asset division. Callum has a passion for global macro investing and has developed strong research and analytical expertise across economies and asset classes. Callum's approach is to utilise a blend of factors to inform the macro view.