If Economists Are Correct About the Future of AI, Here Are 2 Global ETFs to Buy -- and 2 to Avoid

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Why Developed Market ETFs Look Better Than Emerging in the AI Era

Economists see AI productivity gains favouring developed markets—here's how to think about it in a South African context.

Economists agree that AI will drive productivity gains globally, but developed markets are best placed to reap the benefits. Emerging markets, including South Africa, face hurdles like weaker digital infrastructure and higher risks of job losses in outsourced sectors. This isn’t just theory: Vanguard expects international developed markets to outperform US stocks over decades, partly thanks to AI adoption. For JSE investors, this means maintaining some exposure to global developed-market ETFs like VEA or IEFA could provide smoother, long-term growth compared to emerging-market funds like EEM or IEMG, which typically include countries with structural challenges. South African companies won’t escape these trends entirely, but the rand and local stocks might feel pressure if global money shifts away from riskier emerging markets. Watch USD/ZAR closely—if the rand weakens because investors turn cautious, local inflation and interest rates could follow suit. The one big risk? AI surprises on the upside in emerging markets, possibly thanks to leapfrogging technology or unexpected policy shifts. this is just our opinion and not financial advice