Reasons to invest in emerging markets

It is very important for investors to increase their exposure to emerging market.
Listed below are few key reasons-
 Growth in Economy-
In a long term expansion period while emerging markets , developed markets experience a growth slowdown. Emerging markets are projected to hit 4.5% growth this year while developed markets are forecasted to grow just by 2% in the previous year. O this year the growth is predicted to climb to 5%.
According to IMF reports, since consumption is a primary driver of economies, has reported 85% consumption growth due to emerging markets, and this economic growth creates a solid instance for long term investment in emerging markets.
 Stock market rates-
The equity valuations of emerging markets is very convincing. The ratio of long term average price to earnings for emerging markets i.e. (P/E) is approximately 25 and presently the cyclically adjusted price to earning ratios is below 13. Emerging markets trade at roughly a 20-25 percentage discount to industrial markets and this makes emerging market equities a no-brainer for value investors.
 Trading globally-
Emerging markets are responsible for over 50% of industrial market’s trade. It is possible to become big winners as highly developed markets as long as emerging markets policies remain the same.
 The shift in Commodity-
Energy and material stocks made up nearly 40% of global emerging market capitalization and this huge proportion of commodities created enormous volatility in these markets.
The smoother is the equity curve only when the volatility is less that attracts big money investors that helps in supporting the equity markets.
 Demography-
Around 80% of world’s population resides in emerging markets, since developed nation citizens doesn’t skew younger than emerging market citizens. What leads to greater consumption and economic growth is the younger demographic combined with rapidly increasing wealth.
 Price Impulse-
While choosing investments investors must not forget price impulse/momentum. The emerging markets ETF is higher by approximately 26% in the previous year so far. The steady upside impulse gives incentive to continue investment from heavy weight trend following monetary resource.
 Central Bank Policy-
The monetary policy accommodation from central bank of developed nation has kept interest rates extreme low, and these low levels have lifted demands for yielding high in emerging market stocks.
This strongly helps U.S. dollar to increase the price of U.S. exports while on the other hand decreasing the cost of foreign goods and this dynamic acts improves earning overseas.