2021 investing Ideas based on Morgan Stanley forecasts

Emerging Markets

Morgan Stanley projects strong global GDP growth of 6.4% for 2021. This strong growth will be led by emerging markets and reopening economies in The US and Europe.

Here are world growth forecasts by Morgan Stanley:

As you can see emerging market forecasts are much higher than those of The US, Europe, Japan and ..etc. In many developing nations, emerging markets could be the ones driving the growth that all investors are looking for.

Trade-dependent economies, like Korea and Taiwan, are already showing great signs of recovery, and in much larger economies like India and Brazil, a number of indicators have recently exceeded pre-COVID-19 levels and are registering positive year-on-year growth. Morgan Stanley economists expect this momentum to continue into next year. At the same time, emerging markets should benefit from widening U.S. current account deficits, low U.S. real interest rates, a weaker dollar, and accommodative macroeconomic policies. That adds up to 7.4% GDP growth for emerging markets in 2021, led by a forecast 9.8% improvement in India.

There is a way for investors to take advantage of this future growth without screening foreign markets for potential stocks. You can invest in emerging market ETF’s. Here are some of the top ones:

  • iShares Core MSCI Emerging Markets ETF / Ticker: IEMG

IEMG is a very diversified ETF tracking most emerging markets and assets are allocated in many sectors as well. It’s one of the most famous emerging market ETF and has around $66.6 billion under management.  At the time of writing this article IEMG has showed 15.59% return during 1 year.

  • Invesco BLDRS Emerging Markets 50 ADR / Ticker: ADRE

Next on the list is the top choice of money.usnews.com.  This ETF offers exposure to a broad range of emerging markets as well. This market cap-weighted ETF offers investors exposure to fifty of the largest companies based in emerging markets that have depository receipts. These receipts allow the securities to be cross-listed on developing market exchanges which can provide higher levels of liquidity or regulation. For investors looking for greater emerging market exposure with minimal risks, ADRE could make for a fine choice. It`s a much smaller ETF with about $180 million under management, however, it could offer clients much larger upside potential.

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