For emerging markets, technology is the new manufacturing

Technologies like mobile banking, robotics, electric cars and online retailing allow EMs to accelerate growth

Yan Barcelo 10 December, 2018 | 6:00PM

When she does public presentations, Christine Tan likes to ask her audience which economic sector, in their mind, dominates MSCI’s emerging markets index. People always answer “industrials” or “materials”. The more adventurous will propose “financials”.

“Of course, the two first sectors are the ones we usually associate with emerging markets,” admits Tan, assistant vice-president and emerging markets specialist at Sun Life Global Investments, in Toronto. “Well, wrong. It’s technology.”

The share of technology in MSCI’s index is head-to-head with that of the S&P 500 - 30.1% versus 30.8%, at the end of October (percentages include companies in the communications sector). At the end of August, the share of technology in the emerging markets index stood at 32%, nearly four percentage points ahead of the S&P 500’s share of 28.4%.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Alibaba Group Holding Ltd ADR272.41 USD-1.20
Alphabet Inc Class C1,459.99 USD-2.38
Apple Inc106.84 USD-3.17
CGI Inc Class A89.55 CAD0.19
Microsoft Corp200.39 USD-1.24
Taiwan Semiconductor Manufacturing Co Ltd ADR80.23 USD-2.05
Tencent Holdings Ltd ADR67.02 USD0.54

About Author

Yan Barcelo  is a veteran financial and economic journalist with more than 30 years of experience, writing for many publications in Toronto and in Montreal, including CPA MagazineLes Affaires and Commerce.

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