Why Emerging Markets Still Matter in Your Investment Portfolio

Looking Beyond What’s Worked Recently

After over a decade of strong performance from the US stock market, you might be wondering: “Do emerging markets still have a place in my portfolio?” It’s a fair question, especially when returns from countries like Brazil, India, or Indonesia haven’t recently stood out.

But long-term financial planning isn’t about reacting to what’s trending in the markets right now. It’s about building a robust, globally diversified portfolio that can weather different market conditions and help you achieve the life you want.

Key Insights

🌍 Diversification drives resilience – Investing globally reduces your dependence on any one region.

📉 Past performance isn’t the future – Just because one market has recently led doesn’t mean it always will.

📈 Emerging markets offer long-term potential – Higher volatility comes with the opportunity for greater returns.

🧭 Your portfolio needs balance – Every part of your portfolio serves your wider life goals.

The Value of Diversification

As a successful professional over 50, your focus may be shifting from wealth accumulation to wealth preservation, creating a meaningful legacy, or preparing for retirement. That’s why it’s vital to invest with purpose – and that means avoiding overexposure to any single country or sector.

Emerging markets may not always lead, but they remain a key part of the global economy. Including them in your portfolio:

• Spreads your investment risk

• Positions you for growth in rapidly developing economies

• Provides balance against developed market cycles

Yes, emerging markets come with more volatility. Political instability, less developed financial systems, and regulatory risks are part of the landscape. But these risks also come with the potential for higher long-term returns.

Since July 1989, emerging markets have outperformed developed markets by an average of 0.7% annually (measured in GBP). That may not sound like much, but compound that over decades, and the difference is significant.

Crucially, these returns aren’t delivered in a straight line. Some years will test your patience. Others will reward it. That’s the nature of investing – and it’s why we favour a disciplined, diversified approach rather than reacting emotionally to recent performance.

Indices: Fama/French Total US, International, Emerging Markets indices. Period: 01/07/1989 – 31/05/25. Returns in GBP.

Stay Invested for the Long Term

When you look at your portfolio, it’s tempting to consider cutting out underperformers. But this mindset often leads to chasing recent winners and missing out on future growth. A global asset allocation ensures you’re always in the race, no matter which region leads next.

This is the logic behind your globally diversified portfolio. It’s not about betting on today’s winners. It’s about building an investment strategy that’s resilient, data-driven, and aligned with your most cherished life goals.

Your Portfolio Is the Engine of Your Financial Plan

Think of your investments not just as numbers on a screen, but as the engine that powers the goals that matter most to you:

• Retiring with confidence and dignity

• Supporting your family and passing on wealth wisely

• Funding experiences that bring you joy

• Giving to causes that reflect your values

Discipline Over Distraction

Staying focused in a world of market noise isn’t always easy. But at Strategic Wealth Partners, we believe the best outcomes come from clarity, patience, and meaningful planning.

We don’t overweight any one country because it’s fashionable. And we don’t abandon regions simply because they’ve underperformed. Instead, we guide you through a strategy that’s built to stand the test of time.

By remaining globally diversified – including both developed and emerging markets – your portfolio reflects the reality of an interconnected, ever-evolving world.

As a successful individual planning for the next stage of life, your focus should be on ensuring your financial plan is resilient and purposeful. And when it comes to your investment portfolio, while emerging markets can feel like the underdog today, that’s exactly why they deserve your attention. They bring balance, opportunity, and long-term potential to your investment strategy.

For a more detailed discussion on this topic, please feel free to contact us. Our team are always available to answer your questions and to help you with any of your financial planning needs. Here’s what we offer: A cup of coffee… and a second opinion.

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