Key Terms for Global Investing
3 min readGlobal investing is a catch-all phrase for investing in securities from around the world – but there is more to it than just that. Here are some of the different categories associated with global investing:
Global
Invest anywhere in the world including your home country.
International
Invest anywhere in the world except your home country. In Canada, that means both Canada and the United States.
EAFE1
The 21 Developed Markets in Europe, Australasia and the Far East:
Australia | Austria |
Belgium | Denmark |
Finland | France |
Germany | Hong Kong |
Ireland | Israel |
Italy | Japan |
Netherlands | New Zealand |
Norway | Portugal |
Singapore | Spain |
Sweden | Switzerland |
United Kingdom |
Developed Markets (DM)2
The countries whose economies are characterized by the sustainability of economic development – Gross National Income per capita 25% above the World Bank high income threshold3 for three consecutive years.4
Americas | Europe & Middle East | Pacific |
---|---|---|
Canada | Austria | Australia |
United States | Belgium | Hong Kong |
Denmark | Japan | |
Finland | New Zealand | |
France | Singapore | |
Germany | ||
Ireland | ||
Israel | ||
Italy | ||
Netherlands | ||
Norway | ||
Portugal | ||
Spain | ||
Sweden | ||
Switzerland | ||
United Kingdom |
Emerging Markets (EM)2
The income criteria mentioned above helps explain why Brazil, China and India are on the list of the 10 biggest economies, but are still considered “emerging” – the size of their populations translate into a relatively low per capita income.
Americas | Europe & Middle East | Asia |
---|---|---|
Argentina | Czech Republic | China |
Brazil | Egypt | India |
Chile | Greece | Indonesia |
Colombia | Hungary | Korea |
Mexico | Kuwait | Malaysia |
Peru | Poland | Pakistan |
Qatar | Phillippines | |
Russia | Taiwan | |
Saudia Arabia | Thailand | |
South Africa | ||
Turkey | ||
United Arab Emirates |
Frontier markets: the next “emerging” markets2
“Frontier” markets can be classified using a variety of criteria, but are generally countries with lower income levels than the emerging market counties and considered less developed based on their economic level and liquidity. In this frontier phase, globally recognized regulatory authorities and administrations are often still in early development, which potentially leads to lower levels of transparency, shareholder and corporate governance.
Europe & CIS | Africa | Middle East | Asia |
---|---|---|---|
Croatia | Kenya | Bahrain | Bangladesh |
Estonia | Mauritius | Jordan | Sri Lanka |
Lithuania | Morocco | Lebanon | Vietnam |
Kazakhstan | Nigeria | Oman | |
Romania | Tunisia | ||
Serbia | WAEMU6 | ||
Slovenia |
To learn more about global investing, talk to your financial advisor.
1 Source: https://www.msci.com/developed-markets. DM countries of Australasia = Australia, New Zealand. DM countries of the Far East = Hong Kong, Japan and Singapore.
2 Source: https://www.msci.com/market-classification
3 High income threshold for 2019: GNI per capita of US$12,376. World Bank, Atlas method as quoted in MSCI Global Market Accessibility Review (June 2020) www.msci.com/documents/1296102/1330218/MSCI_2020_Global_Market_Accessibility_Review_Report.pdf
4 MSCI Market Classification Framework. Source: MSCI Global Market Accessibility Review (June 2020) www.msci.com/documents/1296102/1330218/MSCI_2020_Global_Market_Accessibility_Review_Report.pdf.
6 The West African Economic and Monetary Union (WAEMU) consists of the following countries: Benin, Burkina Faso, Ivory Coast, Guinea-Bissau, Mali, Niger, Senegal and Togo. Source: https://www.msci.com/market-classification.