Introduction
Some terms that people often hear are Developed Markets, Developing Markets and Least Developed Markets. A financial advisor or investment article might mention them, but you have no idea what they mean. In short, in this situation a market is referring to the business situation of a country. For example: United States is a market, China is a market, Japan is a market, etc. The terms Developed, Developing, and Least Developed refer to groupings of markets. The same way a mutual fund is a group or basket of stocks, Developed, Developing, and Least Developed refer to a basket of countries.
What are Developed Markets?
A Developed Market is a country that is high income, is politically stable, it’s markets are efficient and highly developed, there is openness to foreign ownership, and there is ease of capital movement. The Dow Jones lists 25 countries as Developed. Those countries are Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Luxembourg, Netherlands, New Zealand, Norway, Portugal, South Korea, Singapore, Spain, Sweden, Switzerland, United Kingdom, and United States.
What are Developing Markets?
Developing Markets are defined as countries that do not have good industrial development and have a lower Human Development Index compared to Developed countries. The Human Development Index measures life expectancy, education, and per capita income (income per person). There are two types of Developing Markets. They are Emerging Markets and Frontier Markets.
What are Emerging Markets?
Emerging Markets are markets that have several of the characteristics that a Developed Market has, but it is not yet to that standard. They are likely to become a Developed Market in the near future. The major Emerging Markets are Brazil, China, India, Indonesia, Mexico, Poland, South Africa, Turkey, Egypt, Iran, Russia, Taiwan, and Thailand.
What are Frontier Markets?
Frontier Markets are defined as countries that are still developing and heading the right direction but are still very far from attaining the goal of the Developed Market designation. They have poorer industrial development and a lower Human Development Index compared to Emerging Markets. The Dow Jones lists 30 countries as Frontier Markets. They are Argentina, Bahrain, Bangladesh, Bulgaria, Croatia, Cyprus, Estonia, Jordan, Kazakhstan, Kenya, Kuwait, Latvia, Lebanon, Lithuania, Macedonia, Malta, Mauritius, Nigeria, Oman, Pakistan, Qatar, Romania, Serbia, Slovakia, Slovenia, Sri Lanka, Tunisia, Ukraine, United Arab Emirates, and Vietnam.
What are Least Developed Markets?
All countries that are not Developed or Developing are considered Least Developed Countries. They are countries with high poverty, low education, poor health, high economic weakness, poor industry, and politically unstable.
Why is This Information Significant to Investors?
As you move across the spectrum from Developed to Least Developed, the risk of an investment in that market increases. There is a significant risk that if you invest in a Frontier or Last Developed country that you will never get any of that money back. The risk is low in a Developed country. However, the potential reward for investing in a Frontier or Least Developed country is very high. The potential reward is much higher than the reward from investing a Developed Market.
Investment Fee Structure
| Rate | Assets Under Management |
| 1.44% | Below $125,000 |
| 1.00% | Between $125,000 and $750,000 |
| .85% | Between $750,000 and $1,250,000 |
| .80% | Between $1,250,000 and $1,750,000 |
| .75% | Between $1,750,000 and $2,500,000 |
| .70% | Between $2,500,000 and $3,250,000 |
| .65% | Between $3,250,000 and $4,250,000 |
| .60% | Above $4,250,000 |
A single rate is applied to the entire account. So a person with a $750,000.01 account pays less than a person with a $750,000 account. I will waive personal tax return fees for accounts over $1 million. For accounts that are above $5,250,000, we’ll need to discuss a custom rate.
As I’m writing these to help my readers, I would be very appreciative of any input in regards to what I should write next. If you want me to write about a particular topic, please contact me. Please contact me if you would like to submit a post to my blog.
If anything that I mentioned above interests you, please consider downloading my free e-book. The book contains my thoughts on investment management and some information that I think everyone should know. You can also download it below.
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Questions for the comments
Did my explanation make sense? Do you agree or disagree with what I said?
