Vad är en tillväxtmarknadsfond? | Nordnet Academy

Nordnet Sverige

27 Feb 202402:53

Summary

TLDRA growth market fund is an investment vehicle targeting emerging economies, which are nations on the rise but not yet fully developed. These markets, often referred to as 'Emerging Markets' in English, are commonly tracked by indexes like the MSCI Emerging Markets Index, which includes a significant portion of stocks from China, India, Taiwan, South Korea, and Brazil. While some funds may follow this index, others may have different distributions. Growth market funds are typically index-based, with Asia dominating the investments, but there are also 'Frontier Markets' funds targeting less accessible and more expensive countries like Vietnam, which are actively managed and often come with higher fees.

Takeaways

💡 A 'growth market fund' invests in emerging economies that are developing and have the potential to become developed markets.
🌏 Developed countries like the USA, Sweden, and Japan are contrasted with growth markets which are still developing.
📚 Growth markets are also known as 'Emerging Markets' in English, representing nations on the rise.
📈 If a growth market fund is index-based, it often follows the MSCI Emerging Markets Index, which includes a diverse range of developing countries.
🇨🇳 25% of the MSCI Emerging Markets Index is made up of Chinese stocks, highlighting China's significant role in such funds.
🌍 The index heavily features stocks from China, India, Taiwan, South Korea, and Brazil, which together dominate the index.
📊 Some growth market funds may not follow the MSCI index and could have a different distribution of investments.
📘 Investors should review the summary of any growth market fund to understand which index it follows and its composition.
🌐 Investment in growth market funds is typically in the index they represent, with a focus on Asian markets.
🏞️ Frontier markets are a category beyond emerging markets, including countries not classified as either developed or emerging.
🗺️ Examples of frontier markets include Vietnam and other nations that may have higher management fees due to their more challenging investment landscape.
🔍 Frontier market funds are often actively managed, which may result in higher costs compared to regular growth market funds.

Q & A

What is a growth market fund?
-A growth market fund is an investment fund that focuses on emerging markets, which are countries that are developing and have the potential to become developed nations.
What are growth markets?
-Growth markets are economies that are currently developing and are on the path to becoming developed nations, but have not yet fully reached that status.
What is another term for growth markets?
-Growth markets are also known as 'Emerging Markets' in English.
Which index is commonly followed by index-based growth market funds?
-The most commonly followed index by index-based growth market funds is the MSCI Emerging Markets Index.
What is the composition of the MSCI Emerging Markets Index in terms of the portfolio?
-25% of the portfolio of the MSCI Emerging Markets Index consists of stocks from China, and three-quarters of it consists of stocks from China, India, Taiwan, South Korea, and Brazil.
How do some growth market funds differ from those that follow the MSCI Emerging Markets Index?
-Some growth market funds may follow a different index or have a different distribution of investments, not strictly adhering to the MSCI Emerging Markets Index.
What is Nordnet Tillväxtmarknad Index and how does it relate to growth market funds?
-Nordnet Tillväxtmarknad Index is an example of an index fund that is related to growth market funds, indicating that there are various indexes associated with these funds.
Why is it important to look at the summary of the index a growth market fund is investing in?
-It is important to review the summary of the index to understand the fund's investment strategy, the countries and companies it includes, and to make informed investment decisions.
What is the general trend observed in growth market funds?
-The general trend in growth market funds is that Asian markets, particularly China, India, Taiwan, South Korea, and Brazil, dominate the investments.
What are frontier markets and how do they differ from growth markets?
-Frontier markets are countries that are not classified as either developed or emerging markets. They are typically riskier and less accessible than growth markets and are often actively managed funds with higher fees.
Why are frontier market funds often actively managed and have higher fees?
-Frontier market funds are actively managed and have higher fees because the countries in these markets can be more challenging and costly to invest in, requiring more research and management.

Outlines

00:00

🌐 Introduction to Growth Market Funds

This paragraph introduces the concept of a growth market fund, which invests in emerging economies. It explains that growth markets are countries on the rise that are not yet fully developed but have the potential to become so. The paragraph also clarifies that these markets are often referred to as 'Emerging Markets' in English. It mentions the MSCI Emerging Markets Index as a common benchmark for index-based growth market funds, highlighting the dominance of countries like China, India, Taiwan, South Korea, and Brazil within this index. The summary also touches on the fact that some growth market funds may follow different indexes and have varying distributions of investments.

Mindmap

Keywords

💡Growth Market Fund

A growth market fund is an investment fund that focuses on markets that are experiencing growth or are expected to grow. This is central to the video's theme as it discusses the nature and characteristics of such funds. In the script, it is mentioned that these funds invest in 'growth markets', which are countries that are developing and have the potential to become developed.

💡Developed Countries

Developed countries are nations with a high standard of living, high per capita income, and advanced technological infrastructure. The script uses the USA, Sweden, and Japan as examples of developed countries, contrasting them with growth markets, which are still developing and not yet at the level of these developed nations.

💡Emerging Markets

Emerging markets refer to countries that are in the process of rapid growth and industrialization but have not yet reached the level of developed countries. The term is used in the script to describe the type of markets that growth market funds typically invest in, emphasizing their potential for high returns due to their growth prospects.

💡MSCI Emerging Markets Index

MSCI Emerging Markets Index is a stock market index that represents a subset of the standard MSCI EAFE (Europe, Australasia, Far East) Free Index with a focus on the emerging markets of Brazil, Chile, China, India, Indonesia, Korea, Malaysia, Mexico, Peru, the Philippines, Russia, South Africa, Taiwan, and Thailand. The script mentions this index as a common benchmark for growth market funds, indicating its importance in tracking the performance of these funds.

💡Portfolio Composition

Portfolio composition refers to the allocation of assets within an investment portfolio. In the context of the video, it is used to describe how a growth market fund's assets are distributed, with a significant portion (25%) being allocated to stocks from China, and the majority from countries like India, Taiwan, South Korea, and Brazil.

💡Index Fund

An index fund is a type of investment fund with a portfolio constructed to match or track the components of a financial market index, such as the MSCI Emerging Markets Index mentioned in the script. The video explains that growth market funds, specifically index funds, invest according to the index they track, providing a diversified and cost-effective investment option.

💡Active Management

Active management in the context of investment funds refers to the strategy where a fund manager actively buys and sells securities in an attempt to outperform a certain benchmark index. The script contrasts this with index funds, noting that some growth market funds are actively managed and may have higher fees due to the additional management involved.

💡Frontier Markets

Frontier markets are the most risky and least developed of the emerging markets, often characterized by smaller capitalization and lower liquidity. The script introduces this concept as a category of markets that are not yet considered emerging markets, providing an additional layer of investment options beyond traditional growth market funds.

💡Investment Diversification

Investment diversification is the practice of spreading investments across various financial instruments, industries, and other categories to manage risk and maximize potential returns. The video script discusses the importance of understanding the composition of a growth market fund's portfolio, which inherently involves diversification across different countries and sectors within those growth markets.

💡Asset Allocation

Asset allocation is the process of balancing investments now and over time across different asset classes. In the script, it is implied that growth market funds allocate their assets among various countries and sectors within the growth markets, with a particular emphasis on the dominance of Asian markets in such funds.

💡Investment Fees

Investment fees are the costs associated with managing, administering, or advising on an investment or portfolio. The script notes that actively managed funds, such as some frontier market funds, may have higher fees compared to passively managed index funds due to the additional management and research required.

Highlights

A growth market fund is an investment fund that targets growth markets.

Growth markets are countries on the rise that may become developed but are not quite there yet.

Growth markets are also known as 'Emerging Markets' in English.

Index-based growth market funds commonly follow the MSCI Emerging Markets Index.

The MSCI Emerging Markets Index includes 25% of its portfolio in Chinese stocks.

Three-quarters of the index is made up of stocks from China, India, Taiwan, South Korea, and Brazil.

Some growth market funds may follow a different index and have a different distribution of investments.

Investors should check the summary to understand which index an index fund is following.

Investing in an index fund means investing in the index it represents.

Asian markets, particularly China, India, and South Korea, dominate growth market funds.

There are also 'frontier market funds' which invest in countries not classified as developed or emerging.

Frontier markets include countries like Vietnam and are typically more challenging and costly to invest in.

Frontier market funds are often actively managed and may have higher fees than growth market funds.

Investors are advised to keep an eye on frontier markets as they offer unique opportunities.

Understanding the difference between growth market funds and frontier market funds is important for informed investing.

Nordnet Tillväxtmarknad Index is an example of an index fund for growth markets.

Investors should read more about the specific index they are investing in to make informed decisions.