Favorable demographics are driving rapid economic advancement for emerging markets (EMs) and creating a broader set of opportunities for investors. That was the takeaway from the 2017 Goldman Sachs Asset Management symposium, where panelists were concerned about how rising US interest rates and a stronger USD will impact EM flows, but noted that EM equities have historically done well in a rising rate environment, provided that the Fed “is hiking for reasons that are supportive of EM, such as improving growth.” Still, demographics and middle class expansion will remain defining themes for EM. Anja Manuel, Co-Founder and Partner at Rice Hadley Gates, says “for many EMs, demographics is destiny. For example in 2030, fewer than half of the Chinese population will be working, while more than 70 percent of Indians will be working. This is the moment when India should reap its demographic dividend.” But China remains in a “demographic sweet spot” for now, says Cartica Capital CEO Teresa C. Barger. “As a financial investor with a two- to five-year horizon,” Barger says, “demographics would not be a reason to avoid China now, though there may be other considerations. Within any larger demographic trends, there are micro stories that affect how you invest.”

Overall, talking to CEOs looking to expand into EMs for the first time, Manuel says “I find is that many tend to overestimate the big risks, such as physical security and whether they will lose their whole investment, while underestimating the everyday difficulty of getting things done in countries where relationships are paramount and there’s a lot of red tape. We generally counsel our clients to look at countries that are making the right governance decisions — whether it’s implementing anti-corruption measures or moving up the ease of doing business index. There’s usually a correlation between these reforms and higher growth.”

Away from EMs, Goldman Sachs Securities Division’s clients were more focused on Europe this month, according to the result of the Marquee Quickpoll. The event they are focusing most on globally in April is the first round of the French presidential elections, which is scheduled for 23 April. Over three-quarters of the respondents think Marine Le Pen’s chances of winning the presidency is low or very low. The poll also showed that investors expect the top performing major equity market in April to be the Euro Stoxx 50.