Emerging markets can provide Australian investors with exposure to millions of ‘unbanked’ consumers along with technology giants like Tencent and Alibaba, says UBS.
Speaking to InvestorDaily, UBS Asset Management head of global emerging markets and Asia Pacific equities Geoffrey Wong said there has been a shift in emerging markets over the past decade.
While the resources sector made up 30 per cent of emerging market equities in 2008, it's closer to 13 per cent now, Mr Wong said.
The bigger sectors now include finance and IT – with the latter incorporating semi-conductors and internet software, he said.
"So, it's a space that Australian investors don't have exposure to at home. So, for example, the big internet companies like Tencent, Alibaba, they're not available in the Australian stock market. Same with the semi-conductor companies like Samsung or Taiwanese semi-conductor [firms] as well," he said.
Emerging markets can also provide Australian investors with access to fast growing 'unbanked' consumer segments, Mr Wong said.
"Now Australian's heavily banked already – but that's not the case in emerging markets. In many emerging market countries like India and Indonesia most people still don't have a credit card. So there's a lot more financial penetration to go on in these early emerging markets," he said.
"Emerging markets are giving you an exposure which you can't get in the Australian market itself," Mr Wong said.
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