THE NEW GLOBAL MIDDLE CLASS INVESTMENT THEME
Areas around the world where rising disposable incomes are driving demand for a host of products and services.
The middle-class is one of the primary engines behind consumption and domestic demand making it a key part of the domestic economic engine. And while the middle class is under pressure in the U.S. and other mature markets, according to data published by the Brookings Institute, the middle class is set to grow worldwide by 160 million people per year on average through 2030 and is expected to reach 3.2 billion by 2020 and then reach 4.9 billion by 2030. What is expected to unfold over the coming years is a significant shift in consumption dynamics that will favor the emerging economies like China, India, and larger Asia as well as Africa and several South American countries in the coming years.
Impact of the New Global Middle Class
Shifting Geography Focus
Almost 90% of the next billion entrants into the global middle class will be in Asia: 380 million Indians, 350 million Chinese, and 210 million other Asians. In comparison, on a combined basis North America and Europe are expected to account for only a fifth of the world’s middle-class population, down from more than half in 2010.
Demand for Consumer Goods
While their absolute level of wealth will remain quite low compared with that of consumers in developed countries, this group of 167 million households (close to 400 million people), will set the standard for consumption, capable of affording family cars and small luxury items.
What is Thematic Investing
Thematic investing looks to identify pain points by looking at the intersection of shifting economics, demographics, psychographics and technologies, mixed in with regulatory mandates and other forces. Such pain points result in a pronounced secular market shift that shapes and impacts behavior, forcing companies to make fundamental changes to their businesses to succeed. Read More >>
What We Do at Tematica
Tematica Research provides equity research, economic insights, and investment ideas based upon its proprietary thematic perspective of the world and financial markets. The thematic discipline utilized by Tematica across its research and economic commentary, as well as its index and portfolio construction efforts, is the culmination of the more than 20 years Chief Investment Office Chris Versace spent analyzing industries and companies. Read More >>