LATEST CHART: May 25, 2018

Transcription

1 Through May 25, 2018

2 LATEST CHART: May 25, 2018 McKinsey estimates that the economies of Asia Pacific (including Japan and Australia) could produce $4.5 trillion of additional GDP by 2025 if they were to advance the equality of women in the workplace. While the largest opportunity for change is in India, which could achieve an 18% increase over business-as-usual GDP, the largest absolute opportunity is in China, already above average. Heightening female participation would help drive a 13% increase, contributing $2.6 trillion to the Chinese economy, McKinsey estimates.

3 May 18, 2018 Demand for beer, the world s most popular alcoholic beverage, and snacks is rising in emerging markets at a time when developed markets are becoming saturated and sales are slowing. Challenges in meeting EM demand, according to Nielsen, include refrigeration, distribution channels, inflation and sin taxes.

4 May 11, 2018 Emerging markets economies have made considerable progress in reducing vulnerabilities since the crisis-prone 1980s and 1990s, according to remarks made Tuesday by Federal Reserve Chairman Jerome H. Powell. Capital flows to EMs are increasingly a result of improved fiscal and monetary policies as well as global growth and commodity prices. These should provide insulation from external financial influences such as U.S. monetary policy, Powell said.

5 May 4, 2018 Being the locus of innovation as suggested by Asia s growing dominance as a venture capital provider has the potential to provide a GDP boost for involved emerging markets countries. Artificial intelligence and self-driving cars are among the technologies being funded, according to The Wall Street Journal s report.

6 April 27, 2018 Opportunity will abound as the middle class in India, China, other Asian and emerging markets countries expand their middle class and consumption habits. By 2030, global middle-class consumption could be $29 trillion more than in Only $1 trillion of that will come from more spending in advanced economies, according to Homi Kharas, Brookings.

7 April 20, 2018 Emerging markets and Asia in particular are the best place to gain exposure to technology outside of the United States, according to Epoch Investment Partners. EM in general is trading at attractive valuations relative to the U.S. But this markdown is difficult to justify given the similar fundamentals (dividend yield, EPS growth, RoE...) of EM and DM technology, Epoch writes.

8 April 13, 2018 U.S. equities in 2018 have more than made up for last year, which was one of the least volatile years on record. But through April 8 emerging markets just haven t gotten as worked up. The MSCI Emerging Markets Index closed the quarter with a return of 1.33%.

9 April 6, 2018 Youthful populations such as those enjoyed by many emerging markets are another potential economic advantage. In India, for example, almost half (46%) of the population is younger than 25 and could help accelerate that economy s growth.

10 March 23, 2018 The effect of Fed tightening has not historically hurt emerging markets. In fact, they have been ahead three months after most U.S. interest rate increases. This year, EM is enjoying strong growth globally, stabilizing commodity prices and improving domestic fundamentals. Calamos continues to believe that EM could be at the beginning of a multi-year cycle of outperformance.

11 March 16, 2018 All-time low inflation in emerging markets, according to a recent Danske Bank research note, is the result of continually tight monetary policy, the increasing independence of emerging market central banks, changes in private consumption patterns, growing diversification in response to low commodity prices, and muted global inflationary pressures.

12 March 9, 2018 Advisor Perspectives recently surveyed their financial advisor readers on the 10-year return expectations of an array of asset classes including traditional investments (stocks and bonds) as well as non-traditional such as bitcoin, gold, hedge funds, commodities funds and private equity funds. Of all asset classes surveyed, emerging markets stocks are expected to be the top-performing.

13 March 2, 2018 Selectivity starts with understanding the advantages and challenges of national economies, and the current account balance data provides one view. To fully pursue EM-related opportunities also includes consideration of firms that are both domiciled in an EM and those that generate a significant portion of revenue or invested capital in EMs. It requires broader analysis that s not available in bulk.

14 February 23, 2018 Investors may view emerging markets weakness as an opportunity to build their portfolio allocations back up. The share of emerging markets stocks in portfolios stood at 13.6% as of February 7, 2018, versus an EM equity peak of 21.1% in November 2010, according to Institute of International Finance data. Billions of dollars have already flowed into EM in the last year, and the 2018 dip may enable more of that.

15 February 16, 2018 The Emerging Market Soft Power Index 2017 published by the CEIBS Centre for Emerging Market Studies includes Olympics success in its calculation of soft economic power. As distinguished from hard power that s defined as using kinetic force bombs, soldiers and the like to compel other countries to act in certain ways, soft power refers to the ability to influence behavior. China and Russia the only two EM countries with enough medals to rank in the top 10 of the all-time Olympic Games medal table rank #1 and #2 on the Soft Power Index. Brazil and India, both Olympics underperformers, have been dropped from the index s top 10.

16 February 9, 2018 While offering improvements to all markets, FinTech is the answer for emerging markets whose economic growth is driving demand beyond existing traditional financial systems technology is being used to address money transfer and payments among other financial activities. Of five emerging markets included in the EY survey, China and India have the highest overall FinTech adoption rates of 69% and 52%, respectively.

17 February 2, 2018 Included in the synchronized global growth trend is China, whose % annual GDP growth rate represents a bounce back from a disappointing Over recent years, China has made a concerted effort to broaden its export base beyond commodities and lower-value goods.

18 January 26, 2018 Thanks to both growing sales volume and growing influence in innovative retail concepts and business models, emerging markets will this year surpass Europe and North America in apparel and footwear sales, according to the McKinsey & Company s The State of Fashion Rapidly growing cities in emerging markets are particularly important growth centers, the report says.

19 January 19, 2018 Mobile app usage is an example of how FinTech is driving emerging markets growth, with China and India (whose mobile use has been enabled by subsidized unlimited 4G access) leading worldwide adoption. In addition to ranking first in app downloads, China also is the largest market by consumer spend.

20 January 12, 2018 The upturn in private consumption and investment amid improved confidence and diminishing drag from earlier policy tightening is lifting emerging and developing economies, and helping drive overall global growth. This is according to the World Bank Global Economic Prospects, January 2018.

21 January 5, 2018 There s every reason strong fundamentals, earnings growth and a weaker U.S. dollar to think that the EM bull market has more room to run. Having started January 22, 2016, and posted a 68% return through 12/31/17, the bull run as measured by the MSCI Emerging Markets Index is still younger than two out of three of the last EM bull runs and has returned just half of the lowest returning bull market.

22 December 15, 2017 There s a strong correlation between a weak dollar and non-u.s. risk assets. As global growth picks up, other currencies tend to strengthen against the dollar because of those countries improved prospects. While many EM currencies have gained against the dollar this year, they continue to be attractively valued.

23 December 8, 2017 The data suggests that U.S.-centric investment portfolios both institutional and retail are underdiversified to provide for the benefit of exposure to emerging markets. According to evestment, EM equity comprises less than 3% of U.S. institutional investors long-only assets, and only 3% of mutual fund assets are invested in EM equity funds.

24 December 1, 2017 Even assuming the 2017 bull cycle extends into 2018, investors should not be surprised to experience some volatility leading to drawdowns, as investors experienced from 2002 to However, the capital appreciation opportunity for patient investors may be even more rewarding as the complete market cycle progresses.

25 November 17, 2017 If your clients still think of emerging markets as commodities plays heavily dependent on exports, it s time for a reset. As recently as 10 years ago, old economy leaders dominated benchmarks. But companies included in today s MSCI EM Index increasingly reflect EM s role in an economy that s dynamic and global. This is a critical difference that may drive further capital compounding.

26 November 10, 2017 Synchronized global economic growth is driving demand for major emerging market economies, boosting EM export growth and, in turn, supporting a pickup in domestic demand and nominal GDP. Heightened economic activity and higher revenues are showing up in corporations bottom line results, attracting investor attention.

27 November 3, 2017 Notwithstanding China s official purchasing managers index hitting a five-year high in September followed by an October pullback, China s growing economy shows promise for other emerging market economies as well. One measure: Since hitting a low at the start of the year, China s construction activity is back on a growth track.

28 October 27, 2017 Rising tides raise all boats, or so goes the expression. In emerging markets, the global economic growth underway today is lifting all major emerging market economies. Forecasts for broad earnings growth are key to continued optimism in emerging markets.

29 October 6, 2017 A strong dollar environment prevailed before this year, in part because of the weak-euro and weak-yen environment. With the euro zone and Japan recovering, their currencies are no longer pushing the dollar ever higher. Historically, a weaker dollar and improving global growth has supported strong emerging market returns.

30 September 29, 2017 We re in the second of a three-year (at least) earnings growth trajectory for emerging markets, according to consensus estimates.

31 September 22, 2017 Global equities have enjoyed a strong year, as measured by the 16% return of the MSCI World Index through 9/19/17. But thanks to the trends we ve been noting all year (economic growth, earnings, capital flows and rising currencies), emerging markets have done nearly twice as well with the MSCI Emerging Markets Index returning 31%.

32 September 15, 2017 Over the last three quarters, significant improvement in the developed market investment cycle has supported global trade and EM exports. Demand has climbed back from a recent low in 2015 off 8% and is now up 10% through May.

33 September 8, 2017 Emerging market companies need to invest to grow. But higher capital expenditure spending can impede the ability to produce a return for investors. The decline in average EM capex since 2014 is another encouraging sign.

34 September 1, 2017 As U.S. monetary policy normalizes and the ECB edges toward tapering, some investors are concerned about the implications for emerging markets. However, emerging markets are better positioned now versus years past to withstand the impact of higher interest rates in developed markets. See why in our latest blog post.

35 August 25, 2017 Investment opportunities in emerging markets are dynamic, with windows that open and close making it difficult for a fixed basket of securities to keep up. In fact, over the past three years, the performance of the ishares MSCI Emerging Markets ETF (a passive investment tracking the index) trailed more than two-thirds (65%) of actively managed emerging markets funds.

36 August 18, 2017 The pick-up in emerging markets average daily trading volume is yet another measure of the development of emerging markets over the last quarter-century, and allays investors earlier reservations about the liquidity of the markets. EM is now responsible for one-third of global equity volumes, up significantly in just the last five years.

37 August 11, 2017 Current account surpluses and deficits have meaning to investors, who seek to understand the country or region s role as a trading partner in the world. Emerging markets account balances surpluses are forecasted to continue positive while developed markets are expected to sink into deficit territory in 2018.

38 August 4, 2017 In decades past, rising interest rates in developed markets created challenges for emerging markets. But the quality of many EM balance sheets has improved, which should strengthen investor confidence.

39 July 28, 2017 Investors concerned about high equity valuations of U.S. stocks, eight years into the recovery, don t have the same concern about emerging markets equities. Select EM companies offer earnings growth at still attractive prices.

40 July 21, 2017 Every EM sector but energy gained in the first six months of the year. Technology, real estate and consumer discretionary sector returns exceeded the MSCI EM Index s strong 18.60% gain in an overall positive environment for growth.

41 July 14, 2017 Poland and Turkey took off to a fast start in 2017 while two of last year s performance leaders (Russia and Brazil) suffered a reversal in fortunes. Overall, the MSCI EM Index gained 18.60%, outpacing developed markets and the S&P 500 for the six months ended June 30. Next week s EM Snapshot: an EM sector analysis.

42 LATEST July 7, 2017 CHART: FEBRUARY March JANUARY 31, 17, 20, 6, 17, MSCI s addition of Chinese A-Shares to its emerging market indexes may be a win/win for both investors and China. Inclusion in the index is expected to catalyze more foreign investment and supports Chinese efforts to attract capital inflows. Exposure to onshore companies will provide access to the major drivers of China s GDP, including industrials, consumer staples and materials sectors. The entrance of passive ETF strategies into A shares via the index also may lead to more opportunities for active investors.

43 LATEST June 30, CHART: 2017 FEBRUARY March JANUARY 31, 17, 20, 6, 17, While high equity valuations are a concern to investors in the U.S., opportunity abounds in emerging markets. In an already strong year in India, for example, earnings growth estimates are being revised upward while stocks remain attractively priced.

44 LATEST June 23, CHART: 2017 FEBRUARY March JANUARY 31, 17, 20, 6, 17, This EM Snapshot marks the one-year anniversary of the weekly EM intel update. In addition to these charts, see our recent blog post How Emerging Markets Have Progressed in the Last Year: One Snapshot at a Time for more comparisons of how emerging markets have progressed over the past year.

45 LATEST June 23, CHART: 2017 FEBRUARY March JANUARY 31, 17, 20, 6, 17, This EM Snapshot marks the one-year anniversary of the weekly EM intel update. In addition to these charts, see our recent blog post How Emerging Markets Have Progressed in the Last Year: One Snapshot at a Time for more comparisons of how emerging markets have progressed over the past year.

46 LATEST June 16, CHART: 2017 FEBRUARY March JANUARY 31, 17, 20, 6, 17, As noted in our October 14, 2016 Snapshot, emerging market equities have historically demonstrated notable resilience to U.S. interest rate hikes. This third 25 basis-point increase in seven months reinforces the confidence in the growing global economy, which emerging markets equities can stand to benefit from.

47 LATEST June 2, 2017 CHART: FEBRUARY March JANUARY 31, 17, 20, 6, 17, The U.S. market rallied in the first five months of 2017 but emerging markets rallied more, and investors rushed in. Improving growth profiles, relative valuations and positive earnings revisions argue for long-term investment in select EM countries.

48 LATEST May 26, CHART: 2017 FEBRUARY March JANUARY 31, 17, 20, 6, 17, This week we take a break from plotting emerging markets upward ascent to report on the dramatic shift in options for U.S.-centric investors. Starting with the post-world War II economic build-up of the country, there were 1,000 listed companies in 1956 running up to a peak of 7,322 in Today, the opportunities are contracting. Companies that are listed on exchanges are bigger, older, and in more concentrated sectors than 20 years ago.

49 LATEST May 19, CHART: 2017 FEBRUARY March JANUARY 31, 17, 20, 6, 17, Emerging markets equities have been a popular destination for investors seeking relative yield in a period of easy global monetary policy. But, the prospect of Fed tightening and rising U.S. interest rates has led some to worry about the potential downstream impact to dollar valuations and EM currencies. In fact, EMs over time have shown an increased ability to withstand Fed tightening. As the chart shows, EM equities more recently have gained ground as the Fed has increased rates against the backdrop of a growing global economy.

50 LATEST May 12, CHART: 2017 FEBRUARY March JANUARY 17, 31, 20, 6, 17, The CBOE s Emerging Markets ETF Volatility Index is a key measure of market expectations for price swings in the emerging markets. As the chart shows, volatility has seen fairly mixed trends over the past two years, spiking during major market events. More recently, however, volatility in emerging markets has seen a clear, downward trajectory.

51 LATEST May 5, 2017 CHART: FEBRUARY March JANUARY 31, 17, 20, 6, 17, Emerging markets provide a compelling access point to many of the most powerful secular growth themes in the global economy, such as the rise of the global middle class consumer. Although emerging market-domiciled companies represent only 10% of the global equity market, emerging economies represent the majority of the world s population, landmass, FX reserves, GDP and energy consumption.

52 LATEST April 28, CHART: 2017 FEBRUARY March JANUARY 31, 17, 20, 6, 17, EM and developing economies are increasingly important to the global economy as a whole. According to International Monetary Fund research, the contribution of emerging market and developing economies to global growth output and consumption has increased rapidly over recent decades. With advanced economies undergoing a slow recovery since the global financial crisis, EMs contribution to output growth is forecasted to be double that of advanced economies through the next five years.

53 LATEST April 21, CHART: 2017 FEBRUARY March JANUARY 31, 17, 20, 6, 17, Although economic expansion in EMs may not be as strong as in the U.S. in absolute terms, fundamental economic improvements continue across the emerging markets. Improving growth profiles, relative valuations, and positive earnings revisions continue to support investment opportunities. As the chart shows, earnings for EM regions continue to trend upward since the lows of 2015.

54 LATEST April 7, 2017 CHART: FEBRUARY March JANUARY 31, 17, 20, 6, 17, So far in 2017, emerging market currencies have rebounded versus the dollar. The peso has led (up nearly 11%), followed by the ruble, won, Taiwanese dollar and zloty. Two factors are in play: The dollar pulled back since its post-election rally. But in addition, emerging market currencies have remained resilient despite the potential impacts of Federal Reserve tightening and rising U.S. rates. In just the last few years, many EMs have reduced their deficits, and by extension, their exposure to swings in foreign capital flows.

55 March 31, 2017 As the first quarter comes to a close, emerging markets have returned significant gains year to date, more than doubling the return of developed markets. EM performance was led by Poland, Mexico, South Korea, Chile and India, with China just missing the top five.

56 LATEST March 23, CHART: 2017 FEBRUARY March JANUARY 17, 20, 6, 17, Emerging markets mutual fund flows have turned positive again, reflecting investors building interest in the asset class. The challenge for investors, as suggested by the jagged ascent of MSCI Emerging Markets Index, is how to remain invested throughout. As can be seen at multiple times over the last 20-plus years, those who lost faith and took part in peak selling at market bottoms were largely absent from rallies that followed.

57 March 17, 2017 In the wake of Fed increases, investors worry about the downstream impact on dollar valuations and EM currencies. In three of the past four Fed rate hike regimes, though, EMs outperformed DMs.

58 LATEST March 10, CHART: 2017 FEBRUARY JANUARY 20, 6, 17, Emerging markets offer far-reaching long-term growth potential, but their short-term volatility may make some investors apprehensive. When it comes to EMs, it s important to remember that it s commitment, not timing that matters. As the chart shows, although EMs experienced greater ups and downs over the past 15 years, a $100 investment in EMs significantly outperformed the same investment in DMs. If an investor had taken his or her money out during even the most recent selloff in EMs, the investor would have missed out on the subsequent rally.

59 LATEST March 3, CHART: 2017 FEBRUARY JANUARY 20, 6, 17, Earnings per share (EPS) is a fundamental metric that serves as a gauge of a company s profitability. Using EPS to compare global markets, the chart shows the percentage change in 2017 estimated EPS from January 2 to February 27. Estimates for the U.S., Japan and Europe stayed mostly flat while 2017 estimates for EM were revised up 5%. Note: While EM valuations are improving on the whole, individual economies and markets are not the same. Active research and selectivity remain paramount.

60 LATEST FEBRUARY CHART: 24, 2017 FEBRUARY JANUARY 20, 6, 17, The U.S. presidential election in November interrupted the advance that emerging market equities made in For much of the year, EMs were driven by a narrow rally in cyclicals. Following the election, EMs abruptly sold off and have since faced additional pressures, including the potential impacts of a stronger dollar, rising U.S. interest rates and policy developments. However, while many investors avoided EMs post-election, trends in economic data, earnings and currencies have improved overall, and through February 20, 2017, EM equities led developed and U.S. equities performance.

61 FEBRUARY 17, 2017 Here s an update to our October 14, 2016 EM Snapshot. Rising U.S. interest rates can concern investors. Over the past 25 years, there have been 10 periods when the 10-year U.S. Treasury yield rose more than 100 basis points. During the most recent rising rate period from July 2016 to December 2016, EMs performed positively. On average across all periods, EM equities significantly outperformed U.S. equities and bonds.

62 LATEST FEBRUARY CHART: 10, 2017 JANUARY 20, 6, 2017 As uncertainty swirls regarding U.S. trade policies, data from the IMF points to an interesting and perhaps unexpected trend. Overall, emerging and developing markets have become less dependent on the United States as an export market over the past decade. There s no doubt that U.S. policies affect these markets, but it s important to remember that many emerging and developing markets have made important strides in diversifying their economies.

63 LATEST FEBRUARY CHART: 3, 2017 JANUARY 20, 6, 2017 Recently, returns on equity for emerging market companies have begun to stabilize and recover, after having declined from 2011 to This improvement in EM companies profitability has, in part, been attributable to the rally in commodities after reaching lows in Moreover, many believe EM companies are learning to better control costs in a slower growth environment.

64 LATEST JANUARY CHART: 27, 2017 JANUARY 20, 6, 2017 If your clients think emerging markets are synonymous with commodities, it may be time to update them. The MSCI EM Index, a proxy for investment opportunities in EM, has a greater weighting in technology than even the S&P 500 or other developed market indices including Japan and Europe. Emerging markets offer growth potential across multiple sectors.

65 JANUARY 20, 2017 The IMF expects emerging market and developing economies to continue to lead global growth. However, EMs vary in regard to fundamentals (e.g., deficits, balance of trade, commodity importers vs. exporters, etc.) and other factors, such as economic reform trajectories. Selectivity and targeted exposure may help investors better access investment opportunities in emerging economies.

66 LATEST JANUARY CHART: 13, 2017 JANUARY 6, 2017 The Chinese economy is improving. As the heatmap shows, key trends in both consumption and industrial activities are no longer in contraction mode, with a good share accelerating.

67 JANUARY 6, was a year filled with volatility and uncertainties across global markets, and emerging markets were no exception. Citi s Economic Surprise Indexes track the difference between actual economic data and expectations. As the chart shows, more recently, the index has turned up for emerging markets.

68 DECEMBER 16, 2016 The Organisation for Economic Co-Operation and Development (OECD) measures Main Economic Indicators (MEI) to provide an overall view of short-term economic developments such as national accounts, manufacturing and foreign trade. Recently, upward trends in MEI suggest growth momentum picking up in China and emerging markets overall.

69 DECEMBER 9, 2016 Staying invested through full market cycles even during times of volatility may provide the better long-term outcome. Of course, investors would prefer to miss the worst days and benefit with a better overall return. But attempting to time markets introduces additional risk, when investing in emerging markets in particular. EM markets can move fast, likely resulting in timers missing out on the best days, too.

70 DECEMBER 2, 2016 Here s a sequel to our September 30, 2016, EM Snapshot, which showed the improving economic freedom scores of Thailand, the Philippines, Indonesia and India, as tracked by the Heritage Foundation s Economic Freedom index. Countries moving toward positive economic policy and reforms tend to be less dependent on external factors for growth. As we ve said before, we believe capital will ultimately flow to where it is treated best.

71 NOVEMBER 18, 2016 Countries within the emerging markets index have vastly different levels of volatility and the index-driven investor is exposed to all of it. Through active management favoring India instead of Brazil, for example a portfolio manager has more opportunities to tailor the risk profile of an EM fund.

72 NOVEMBER 11, 2016 Because major emerging market indices are weighted by the market capitalization of each constituent, they emphasize large companies, some of which are state-controlled entities. This leads to several questions. Whose interests come first? And, since many of the large companies in the index are export-oriented, do investors have as much exposure to local markets as they may think?

73 NOVEMBER 4, 2016 Emerging markets increasingly represent the critical growth engine for the world s economy, we believe. Since 2012, the world s top-performing market has been an emerging market, and EMs have been four of the top five performers in two of the last four years. Emerging markets are on track to finish 2016 on top as well, as new growth markets and investment opportunities keep on coming.

74 LATEST OCTOBER CHART: 28, 2016 OCTOBER 14, 7, 2016 Financial advisors are wise to prepare their clients for the volatility that s inherent in emerging market equity investing. Unlike developed markets, emerging markets can soar and they can plummet. Over the long term as can be seen in two of the larger inflection points in the last decade EM investors have been richly rewarded for taking on the greater risk.

75 LATEST OCTOBER CHART: 21, 2016 OCTOBER 14, 7, 2016 Increased demand for internet-related products and services among a rapidly expanding emerging market middle class represents untapped potential for global companies supplying that demand including those domiciled in developed markets. Example: China s nearly 700 million internet users make it the largest market in the world. Yet, China s internet penetration rate is less than 50%, well below the nearly 90% in the U.S.

76 OCTOBER 14, 2016 Emerging markets are generally less fragile and better positioned ahead of future rate hikes than they have been in the past. Compared to just a few years ago, many EMs have reduced their deficits, and by extension their vulnerability to foreign capital flows, and many EM currencies have stabilized versus the dollar.

77 OCTOBER 7, 2016 Emerging markets offer tremendous longer-term growth potential and will likely be a critical source of capital appreciation for growth-seeking investors. Fifteen years ago, companies based in emerging markets made up 5% of the Fortune Global 500. By 2010 that number more than tripled and by 2025 nearly half (46%) of the world s top revenue producers will be based in emerging markets. This is according to McKinsey research forecasts

78 SEPTEMBER 30, 2016 The performance of Russia, Brazil and South Africa markets have grabbed the headlines so far this year. Over the long term, though, expanding economic freedoms may be one of the most powerful catalysts for economic growth and investment opportunity. We believe the stage is set for more robust economic growth as well as increased investment opportunities across a range of industries in these markets.

79 SEPTEMBER 23, 2016 By 2020, the growth rates of the fastest growing emerging markets are expected to far exceed those of the fastest growing developed markets. The United States just missed the top 10 developed markets, with a 2020 forecasted GDP growth of 2%.

80 SEPTEMBER 16, 2016 While equities globally have been celebrating low interest rates, EM equities had not been benefiting. For the past few years, higher inflation and risk premiums had produced absolute yields fluctuating between 5%-6% on average. However, cooling inflation in EMs has allowed for monetary policies to be eased, helping absolute yields fall.

81 SEPTEMBER 9, 2016 Here s a second part to our August 19 EM Snapshot: Fund flows and performance tend to go hand in hand, and when there s a change in direction, it s often a multiple year trend. From 2009 through 2012, emerging markets outperformed and saw stronger flows than developed markets is 2016 just the beginning?

82 SEPTEMBER 2, 2016 Can tracking an index provide the emerging markets exposure investors need? The global economy has evolved since the inception of the MSCI Emerging Markets Index in 1988, and the underlying constituents have changed. Keep in mind that the index in 2016 still captures a fraction of the world market capitalization, and that the index is reviewed quarterly and rebalanced semiannually. By contrast, an active approach to EMs helps assure that a portfolio pursues a breadth of evolving opportunities.

83 AUGUST 26, 2016 As the 2016 emerging markets rally continued, the drivers of the rally have shifted from value stocks to growth stocks.

84 AUGUST 19, 2016 At the halfway mark of 2016, anemic fund flows reflect low-to-negative interest rates, bouts of volatility and investor concerns about growth prospects in developed markets. But while DM fund flows have turned negative, investors quest for total return and yield have driven positive emerging market equity fund flows.

85 AUGUST 12, 2016 Since the 1988 inception of the MSCI EM Index, there have been 7 major (25% or more) drawdowns in EMs. In each instance, the major drawdown was followed by a rally. July 21 marked the six-month anniversary of the January low in EM equities. This recent rally is fairly similar to the average of the past market rebounds.

86 AUGUST 5, 2016 Emerging markets have recently rallied. We believe a variety of factors could support a continued advance. These include attractive valuations, improving economic fundamentals, and a stabilization in currencies and commodities.

87 JULY 29, 2016 Even as the Chinese economy slows, consumption trends support investable opportunities. In China, upper middle class consumers under age 35 are expected to account for 65% of total consumption growth through Along with a growing middle class, there has been an increased demand for aspirational luxury consumers wanting premium or name brand products.

88 JULY 22, 2016 The expanding role of emerging market issuers is one of the most exciting trends in the convertible market. In fact, the largest issue to date in 2016 has been from a Chinese internet company. We believe convertible issuance in Asia can expand materially.

89 JULY 15, 2016 Investors may think they have more or less exposure to certain countries than they actually do. It is important to understand that the size of a country is not directly proportional to its investability for foreign investors. Some EM countries are among the world s largest economies and yet only a tiny fraction is available to investors. This chart shows the differences between GDP size and weighting in the MSCI EM Index for several countries.

90 JULY 8, 2016 Trade exposure between certain emerging market countries and the European Union is limited, with the BRICs and MINTs country trades with the EU at 20% or below, versus 80% or more with the rest of the world.

91 JULY 1, 2016 The growing middle class and national prosperity in EMs are reshaping the global economy and creating opportunities for companies around the world. Emerging countries are expected to increase their share of the global medium-high middle classes and affluent segments from 24% in 2000 to 67% by 2025.*

92 JUNE 24, 2016

93 JUNE 17, 2016

94 This is how EM Investing Is done. We invite you to try Our Way, here's how we do it. The days of wait-and-see are over. More and more of the world s growth will happen in emerging markets. Advisors, clients and prospects know this by now. Windows open and close. The impact of emerging markets as infrastructure is built, corporations mature and a consumer middle class emerges is being felt across the world, across countries and across companies. These opportunities are dynamic. They present themselves in windows that continuously open and close. A fixed basket of emerging markets countriesonly can t keep up. Crises are to be expected. Crises need to be avoided, that s why you hire us. Our objective is to minimize drawdowns. We invest to keep investors invested, moving forward, and we use convertible securities. Because of course we would. We re investing, not trading. From time to time, low-quality companies in poor prospect countries will rally. Those are rallies we will miss, more likely than not. Where we invest is based on where we believe capital is treated well and we can manage the significant and inevitable risk of emerging markets. With growth comes more choice. Advisors have never had more ways, including from more than one provider, to build emerging market exposure for a client. Our differences in how we approach emerging markets are our strengths, how we contribute. Important Disclosures The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. Information contained herein is for informational purposes only and should not be considered investment advice. Foreign Securities Risk Risks associated with investing in foreign securities include fluctuations in the exchange rates of foreign currencies that may affect the U.S. dollar value of a security, the possibility of substantial price volatility as a result of political and economic instability in the foreign country, less public information about issuers of securities, different securities regulation, different accounting, auditing and financial reporting standards and less liquidity than in U.S. markets. Emerging Markets Risk Emerging market countries may have relatively unstable governments and economies based on only a few industries, which may cause greater instability. The value of emerging market securities will likely be particularly sensitive to changes in the economies of such countries. These countries are also more likely to experience higher levels of inflation, deflation or currency devaluations, which could hurt their economies and securities markets. The MSCI Emerging Markets Index-is a free float-adjusted market capitalization index. As of August 2005, the index consisted of the following 26 emerging market country indices: Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Israel, Jordan, Korea, Malaysia, Mexico, Morocco, Pakistan, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand, Turkey and Venezuela. The index represents companies within these countries that are available to investors worldwide. Unmanaged index returns assume reinvestment of any and all distributions and, unlike fund returns, do not reflect fees, expenses or sales charges. Investors cannot invest directly in an index. MSCI World Index is a market capitalization weighted index composed of companies representative of the market structure of 21 developed market countries in North America, Europe, and the Asia/Pacific region. S&P 500 Index is a market weighted index and is widely regarded as the standard for measuring U.S. stock market performance. MSCI Europe Index is a free float adjusted market capitalization weighted index that is designed to measure the equity market performance of the developed markets in Europe. MSCI Japan Index is designed to measure the performance of the large and mid-cap segments of the Japanese market with 319 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in Japan Before investing carefully consider the fund's investment objectives, risks, charges and expenses. Please see the prospectus and summary prospectus containing this and other information or call Read it carefully before investing. Calamos Financial Services LLC, Distributor 2018 Calamos Investments LLC. All Rights Reserved. Calamos, Calamos Investments and Investment strategies for your serious money are registered trademarks of Calamos Investments LLC. Calamos Investments LLC, referred to herein as Calamos Investments, is a financial services company offering such services through its subsidiaries: Calamos Advisors LLC, Calamos Wealth Management LLC, Calamos Investments LLP and Calamos Financial Services LLC. Important Legal Information Privacy Policy Business Continuity Code of Business Conduct and Ethics