Young Markets for Young Investors

Why ‘Emerging EMEA’ for Young Investors?

Value: Shares often attractively priced compared to other markets

Potential: At an early stage of their economic development, meaning that their big growth years could be ahead of them

Demographics: Often have young but educated populations driving change and innovation

Diversification: A strong focus on domestic demand rather than global exports gives them some protection from global events, helping to spread risk in a portfolio

“The best time to plant a tree was 20 years ago. The second best time is now”

A Chinese Proverb

Any reasonably experienced investor can—when looking back at past performance—point to companies, funds and markets they WISH they had invested in 20, 30 or more years ago. Who doesn’t wish they had got into Apple stock when it first floated in 1980, given that $1,000 invested then would be worth well over $2 million today?¹ Or got into China when it was the world’s ninth-largest economy (now the world’s second-largest)?

Hindsight is a wonderful thing. But if you’re a young investor, the exciting thing is the sheer array of possibility on offer for taking long-term positions in companies and markets that could be the growth stories of the future.

The world’s emerging markets have long been seen as a staple portfolio holding for investors of all kinds. These economies at the early stage of their development can be especially appealing for younger investors who have the time to ride out the downs as well as the ups that such markets can entail.

A Different Emerging Market Region

Many people associate emerging markets primarily with Asia or Latin America. But there is also a swathe of compelling and fast-growing economies in the so-called ‘Emerging EMEA’ region comprising Eastern Europe, the Middle East and Africa. For example:

Poland
Has a young and skilled workforce and strong domestic spending is helping to grow its economy. It’s also an attractive destination in Europe for foreign direct investment as companies look to relocate manufacturing closer to their target markets.

Greece
A decade after teetering on the edge of a Eurozone exit, Greece has defied critics and rebounded, delivering some of the strongest growth in Europe, supported by a business-friendly government and an appetite to modernise.

South Africa
A co-operative government that’s keen to push through reform, brighter prospects for the mining sector and a growing number of financially disciplined companies—like Capitec in banking and Naspers, the multimedia and online retail giant—are making South Africa a compelling prospect to global investors again.

Saudi Arabia
Known best for its huge oil reserves, the largest country in the Middle East is undergoing a remarkable transformation since the launch of its ‘Vision 2030’ in 2016. This seeks to build a far much diversified Saudi economy, expanding into renewable energy, tourism and sports, with mega-infrastructure projects to build new tourist destinations, urban parks—even a whole new city.

Potential at Attractive Valuations

A big appeal of these markets is that they are often at an early stage in the demographic, technological and consumer shifts that have generated long-term growth in other markets, such as transformation of urban infrastructure, the growth of consumer-focused middle classes, and the expansion of e-commerce.

By viewing these markets as long-term portfolio holdings, young investors are well positioned to share in growth resulting from their economic development.

Also, because these markets currently receive less attention from investors than other regions, there is lots of opportunity to find quality companies at attractive valuations. For example, shares in Poland are, on average, trading at just over 11 times the earnings their companies are generating. On the highly-scrutinised US stock market, companies are more than twice as expensive, trading at 24 times their earnings, on average.²

Investing in Emerging EMEA

Although the general long-term growth trajectory for many Emerging EMEA markets looks positive, it’s still highly important to be selective in where and in what you invest.

Barings Emerging EMEA Opportunities plc is an investment company that looks to bring together a concentrated portfolio of 30–60 of the best ideas that its investment team can find across the region. Stocks are individually selected through first-hand meetings and analysis to find companies with strong business models and sustained growth prospects but that are currently underpriced by the market.

Through this highly active and selective approach, the company has seen strong recent performance against its own benchmark over one, three and five years (as of May 31, 2025, net of fees) Please note, past performance is not a guide to future performance.

Using Your ISAs

There is no guarantee how Emerging EMEA markets will perform in the future. But their long-term growth potential can make them an attractive addition to any portfolio intended to help a young person finance their lifetime goals.

Investment funds like Barings Emerging EMEA Opportunities plc can be held in individual savings accounts (ISAs) to shield growth and income from tax. That includes Junior ISAs, which can invest up to £9,000 a year for investors under 16, and Lifetime ISAs, which allow 18–39 year-olds to invest up to £4,000 a year (plus a government bonus of up to £1,000) to put towards either a first home or retirement. (Do note that the tax treatment of ISAs could change in the future.)

In Short

As a young investor it’s important to be future-focused—seeking out those markets and companies that have the potential for strong growth in the future, not just those that have delivered powerful returns in the past.

Emerging EMEA is a region that many investors have overlooked to date—but now offers the potential for compelling performance as its various populations grasp the opportunity to modernise, innovate and diversify their economies.

For anyone with 30, 40 or 50 years of investing ahead of them, it’s an investment region that’s definitely worth investigation.

To Find Out More Visit bemoplc.com and Sign Up for the Latest News on Emerging Emea

Investment involves risk. The value of any investments and any income generated may go down as well as up and is not guaranteed. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. Changes in currency exchange rates may affect the value of investments. Emerging markets or less developed countries may face more political, economic or structural challenges than developed countries. Coupled with less developed regulation, this means your money is at greater risk. Any investment results, portfolio compositions and or examples set forth in this document are provided for illustrative purposes only and are not indicative of any future investment results, future portfolio composition or investments. The document is for informational purposes only and is not an offer or solicitation for the purchase or sale of shares in the Company. It is recommended that prospective investors seek independent advice as appropriate. The Key Information Document (KID) must be received and read before investing. This and other documents, such as the prospectus, latest fact sheet, annual and semi-annual reports, are available from www.bemoplc.com Although every effort is taken to ensure that the information contained in this document is accurate, Barings makes no representation or warranty, express or implied, regarding the accuracy, completeness or adequacy of the information. Baring Asset Management Limited, 20 Old Bailey, London, EC4M 7BF, United Kingdom. Authorised and regulated by the Financial Conduct Authority. Date of issue: June 2025

1. Apple stock growth: Apple IPO anniversary: A $1000 investment 44 years ago would have made your richer by 249,900% by now - The Economic Times
2. World Areas and current P/E Ratios