The opportunity that's consistently overlooked

Paul Wylie

Mason Stevens

Hans Rosling was a Swedish public health researcher who died of pancreatic cancer in 2017. He launched a website called and posthumously published a book called Factfulness. The website and book are devoted to tackling people's perceptions of the world versus reality.  

"People who live in poor countries have to be entrepreneurial even just to survive." - Ha-Joon Chang 

After conducting extensive surveys, Rosling found there is a high level of ignorance and concluded that most people think the world is much worse off than it actually is. In fact, he found in his so called "chimpanzee test" that chimpanzees did better than his university students in their knowledge of the current state of the world (i.e. randomly chosen answers outperformed). Examples of the types of questions he asked are as follows - see how you go: 

What is the average life expectancy of the world population?

A.  50 years

B.  60 years

C.  70 years


What percentage of the world's 1-year-old children today have been vaccinated against some disease?

A:  20 percent 

B:  50 percent 

C:  80 percent 


Congratulations if you chose answer C for both questions. The average life expectancy of the world population is 70 years, and most children have received at least some vaccination before their first birthday. 

If you got both answers wrong, you are not alone. The vaccination question was posed to an investment banking conference and 88 percent of the audience opted for answer A. In fact, out of the 12,000+ people who have taken the test so far (, the vast majority got most (if not all) questions wrong. The world is in much better shape than most people think. 

Rosling identified some key reasons for why there was so much ignorance. He found that people had limited or fragmented information, and that digesting statistical facts doesn't come naturally to most people. He found that people understand the world by generalizing personal experiences, which are often very biased. 

In the media, "newsworthy" stories exaggerate the unusual and put the focus on swift changes. The slow and steady changes that underlie major trends don't get much mainstream media attention. Unintentionally, people end up accumulating a pile of outdated facts, some of them acquired in school (including knowledge that was outdated even then). 

The Gapminder Project is about making statistics more accessible and digestible. An example can be seen in the screen shots and link below. They show the progression of life expectancy versus income for China (fat dot) and Australia (small dot) over time. In 1800, Australians and Chinese had pretty much the same annual income and life expectancy, at around US$900 (in today's dollars) and 34 years.  

By 1945 it looked like this - China had barely moved, whereas Australia by then was already one of the richest countries in the world.




Source:  Gapminder

But by 2018, China was catching up.




Source:  Gapminder

You can watch the whole trajectory over time by clicking the play button in the bottom left corner of this link.

Bloomberg's review of Rosling's book Factfulness states: "Rosling's following passage suggests strongly that the financial community is persistently and systematically missing a great opportunity. He writes - 'Vaccines must be kept cold all the way from the factory to the arm of the child. They are shipped in refrigerated containers to harbors around the world, where they get loaded into refrigerated trucks. These trucks take them to local health clinics, where they are stored in refrigerators. These logistic distribution paths are called cool chains. For cool chains to work, you need all the basic infrastructure for transport, electricity, education and health care to be in place. This is exactly the same infrastructure needed to establish new factories.'" 

The developing world is far more developed than most of us (including me) know, and has at least some of the infrastructure needed to support growth. So why isn't it more developed than it is? In my view, it is partly due to a lack of financial investment (due to some of the biases described above), and partly due to corruption and the lack of enforceable law. If it is less of the latter and more of the former, then there are big opportunities for investors with long time horizons, and not necessarily just via listed equity markets.  

The chart below shows the performance of the MSCI Frontier Markets Index since inception in 2002 to now, compared to other equity markets. MSCI set up the Frontier Markets Index to help investors access these types of markets, but to date it has only matched the MSCI World Index (with greater volatility). 

2019.01.31.2 Source:  Bloomberg

To get the full benefit of investing in frontier markets, it might be necessary to take a leaf out of Jim Rogers' playbook (the co-founder of the Quantum Fund) - that is to head there and invest directly.  

Paul Wylie
Fixed income Investment Strategist
Mason Stevens

Paul is an experienced global credit portfolio manager, having recently held the positions of Global Head of Credit Solutions and Strategic Trading for Lloyds Banking Group.

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