NEW YORK—Growth in emerging markets has the potential to outpace the U.S. Baby Boomer explosion by 25 times, and as consumption and infrastructure in these nations builds, specialized emerging market exchange-traded funds will become increasingly viable, said Robert Lutts, president and chief investment officer of Cabot Money Management.
Lutts was speaking at the ETF 360: Investing Strategies for Advisors conference here Thursday, sponsored by sister publications Financial Planning, On Wall Street and Bank Investment Consultant.
“The exciting new area in the emerging markets space is the consumption story,” Lutts said. “Lower-cost labor is driving capital to these countries” and improving standards of living at unprecedented rates, he said. “Incomes have risen 10% a year for the past two years in China, creating tremendous demands for automobiles, retail goods and healthcare.” And as these needs grow, the infrastructure to deliver the goods needs to be built.
“It’s exactly like our Baby Boomer explosion, but it’s 25 times bigger,” Lutts said.
Bruno del Ama, co-founder and CEO of Global X Funds, agreed: “We see a lot of growth in emerging markets and ask ourselves what the world will look like in 25 to 30 years.”