Emerging Markets

Emerging markets are economies undergoing rapid growth and industrialization, supported by expanding financial systems and rising domestic demand. While they account for roughly 85% of the world’s population and nearly 60% of global GDP growth, they receive only 15–20% of institutional capital allocation.

These markets are expected to be the primary engine of global growth. In 2025, emerging markets are projected to drive approximately two-thirds of global GDP growth, outpacing developed economies by nearly 2.5x. This growth dynamic is often accompanied by higher nominal interest rates and local-currency yields that exceed inflation, reflecting both macroeconomic momentum and structural risk premiums.

Despite this yield potential, access to emerging-market returns remains constrained. Regulatory frameworks, custody requirements, capital controls, and fragmented market infrastructure often limit participation to domestic investors or select institutions with local presence and specialized capabilities. As a result, many global investors are structurally unable to access local-currency yield opportunities, even where fundamentals are strong.

These access constraints are a core reason why emerging-market yield remains under-allocated. Reducing friction around market access, custody, and settlement is key to unlocking capital flows into economies that are already driving the majority of global growth.