Seeking Growth in Emerging Markets: Exploring Consumer Trends

Why We Think Consumption Habits in Emerging Markets have Evolved and the Potential Implications for Investors

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Emerging markets offer attractive investment opportunities, supported by favorable economic fundamentals and a rapidly expanding middle class. But, classic consumption patterns appear to be evolving, and this could have implications for emerging markets investors. Here’s why:

  • For most of the last twenty years, leading companies that cater to the basic needs of emerging market consumers have generally enjoyed healthy double-digit sales growth.
  • We believe that in recent years the spending patterns of developing world consumers have fundamentally shifted.
  • Consumption of basic staples products is increasingly being crowded out by spending on more engaging and aspirational wants, such as smartphones, video games, and wellness products.
  • This research has helped shape the construction of the Polen Capital Global Emerging Markets Growth Strategy, which seeks to invest in a concentrated portfolio of competitively advantaged businesses that we believe can compound their earnings at attractive double-digit rates over the next decade.

Graph showing the classic consumer product S-curve

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Important Disclosures
The information provided in these materials should not be construed as a recommendation to purchase, hold or sell any particular security. There is no assurance that any securities discussed herein will remain in the portfolio at the time you receive these materials or that the securities sold have not been repurchased. The securities discussed do not represent the entire portfolio. It should not be assumed that any of the securities, transactions or holdings discussed were or will prove to be profitable or that any investment recommendations we make in the future will equal the investment performance of the securities discussed herein.

Past performance is not indicative of future results. The information provided in these materials is not intended as a guarantee of profitable outcomes. The opinions and estimates expressed herein constitute the judgment of Polen Capital and are subject to change without notice or update, including any forward-looking estimates or statements which are based on certain expectations and assumptions.