page 2 of 9 |
| Global Emerging Markets Fund (GEMFX) Discover the growth opportunities in emerging markets. Our specialized fund gives you the opportunity to diversify your portfolio globally while adding capital appreciation potential and a possible hedge against inflation. Why Invest in Global Emerging Markets? Emerging-market countries include some of the world’s fastest growing economies. Many of these have undergone significant change over the last few decades. For example, China, the world’s most populous nation, has evolved from a command economy to one with a vibrant private sector. In other Asian countries such as Korea and Thailand, many businesses that appeared to be managed purely for the benefit of controlling shareholders are, since the Asian crisis of 1997, now taking the interests of minority investors into consideration. The former communist countries of Eastern Europe have become capitalist following the fall of the Berlin Wall and the collapse of the Soviet Union. The European Union welcomed ten new members, including eight countries formerly under communist rule. Meanwhile, in Latin America, many countries have made the transition from military dictatorship to democracy. Over the same period of time, stock markets in emerging nations have also opened up. Countries such as China and Russia have introduced stock markets. In other markets like Korea, Taiwan and India, it is now easier for foreigners to buy stocks than a decade or two ago. |
The transition to democracy has also been accompanied by an increase in the number of talented individuals from emerging economies traveling to the United States and other developed countries to study. Many of these individuals return to their home countries and are expected to constitute a new, educated, professional elite. This should, in turn, improve the prospects of the companies they manage and the economies as a whole.
Many global emerging economies have more favorable demographics than developed countries. The percentage of working population is often higher and many countries will not, in the next twenty years, encounter the same pension fund problems faced by richer economies. Several nations of these economies are the factories of the world, with significantly lower wage rates and lower taxes. Among these are countries that benefit from membership in the North American Free Trade Association or the European Union. The Global Emerging Markets Fund employs a bottom-up stock selection process aiming to find the best opportunities for achieving long-term capital gains in this asset class.
|
| According to the World Bank, 84 percent of the world’s population live in emerging nations, but these countries account for only 16 percent of global GDP. Developed countries such as the U.S., Europe, Japan and Canada are 16 percent of the world, but 84 percent of the GDP. On a purchasing power parity basis, nearly two-fifths of the world’s economy is in emerging markets. In terms of stock markets however, emerging markets provide only 5 percent of the world’s capitalization whereas they actually account for 38 percent of the purchasing power parity. | |
 |
|
not part of prospectus
page 2 of 9 |