An inflation shock or a sharp contraction in the prospect for global growth would also serve as major headwinds for emerging market stocks, but Langridge regards these as unlikely risks.
Even China’s debt situation, which has caused many investors to panic, isn’t dire enough to bring about a dislocation.
“Are there risks in China? Yes. Is it inevitably toxic? Absolutely not.”
“The authorities will have to negotiate a very complex tightrope of challenges and if they fall off the tightrope, yes, there will be some major problems, but I don’t think those problems will be immediate,” she said.
