For as long as anyone can remember, the power consumers have been domiciled in the United States and it was our spending powering retail exchange traded funds (ETFs). That’s no longer. Emerging markets are now taking the lead in consuming goods, so that’s where those hawking their wares have turned their attention.
During the recession, emerging market consumption surpassed U.S. consumption for the first time, equaling 32% of the global share compared to 28% for the United States, reports Pallavi Gogoi for DailyFinance. [ETF Strategies for Playing the BRICs.]
Mauro Guillen, professor and director of the Lauder Institute, says that “emerging economies, like India and China, with very large populations, have not only done well economically in the last decade but their personal incomes have risen exponentially, too.” Furthermore, those countries continued to grow as the United States went through a deep recession. [India ETF: A Proving Ground for Global Markets.]
Economic indicators such as earnings and exports were much more favorable in Asian markets as compared to those in the United States, where they either remained stagnant or declined. Additionally, developing countries have a rising middle class that will be consuming even more in the future. Consequently, the flow of trade could reverse as emerging markets import more and developed countries start exporting more. [China ETF Plays: One Country, Many Options.]