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World Economics: What We Do

 

We Track and Rate Haystacks

John Bogle, the founder of Vanguard, was fond of advising investors to avoid looking for needles, and instead buy the haystack. His advice has proved right with the massive growth of Vanguard's concept of Index investing now decimating the ranks of advisors unable to outperform machines.

The advice was made during the days when the US markets bestrode the world, and all an investor needed to do was put money into the S&P 500. But the world has changed. The US has been displaced by China as the primary engine of economic growth. In 2020 the US magazine Forbes announced that its Global 500 listing of top companies had become "more Chinese than American". Just twenty years ago there were only 10 Chinese companies in the list...

Buying the American haystack is no longer a guarantee of long term investment success. The Asian haystack is now much bigger than the US one. But poor data hides the reality.



Radical changes are taking place in the world economy, obscured by poor GDP data.
The chart below illustrates some recent trends using our upgraded GDP data:

Asia now represents 44% of global GDP (up from 35% in 2010), will probably exceed 50% by 2030, and created an astonishing 65% of global growth over the past decade.





Bad data distorts change

Economic statistics derived from individual countries (particularly Asian ones in which economic growth is concentrated) seriously underestimate GDP and Wealth. Some country data is so bad as to be unusable.


Missed opportunities

One result of the underestimation of GDP levels in developing countries is that Emerging Markets represent little more than 10% of global equity indices.

As the world's biggest hedge funds and asset managers have stressed of late, this reflects missed opportunity for both countries and investors.




Increased Data Integrity

World Economics after a decade of research has produced a series of new databases that provides a radically different view of the reality of global economic growth in 100+ countries, of great relevance and utility to investors of all kinds.

The new database includes:



World Economics - who uses our data ?

World Economics and its parent Information Sciences has for 30 years specialised in researching and founding economic data series that have become part of the financial world's DNA. Almost all significant banks, financial institutions, major corporations and Governments have subscribed to our services in the past three decades.

Examples of our work include founding the Purchasing Managers Manufacturing Indexes in 25 countries, and the first Eurozone and first Global Purchasing Managers Indexes (all now owned by S&P Global); the founding of the first Country, Region and Global Service Sector Indexes (all now owned by S&P Global), the first Harmonised European and Global Media data and the World Advertising Research Center (both now owned by Ascential plc); and much more.