An ‘extraordinary period of monetary experiment’ is a risky backdrop for any emerging market strategy to invest in but Henderson’s Glen Finegan takes solace in a long-term contrarian view that throws up plenty of opportunities.
As Brexit fatigue tightens its grip on us all, particularly those who have been writing about it for a living, and the United States gets going with its election, things have been suspiciously quiet on the China front.
Despite worries that current market stress could result in significant outflows from emerging markets in the short term, for Neuberger Berman’s fixed income CIO, Brad Tank, emerging market debt remains a fantastic place to invest over the longer term.
The macro drivers for emerging market equities are largely unaffected by Brexit according to JP Morgan, and the firm maintains its overweight.
Financial markets have lacked direction in recent months, with the main equity indices all very close to where they were at the start of the year. Macroeconomic data are not strong enough to reinvigorate the bull market, yet not sufficiently weak to stoke fears of recession.
Baring Asset Management’s multi asset group has increased its exposure to emerging Asian markets for the first time in years and upgraded the asset class from a neutral to preferred.
Positive developments such as evidence of an underlying improvement in industrial production and exports in Asia are luring investors back into emerging markets, said Pictet Asset Management’s chief strategist Luca Paolini.
The MSCI Russia Index has been positive for 18 months while Russia-focused mutual funds have stayed negative.
The deep discount on which EM dividend stocks trade versus bonds are a compelling reason to relook at the sector, said WisdomTree’s Viktor Nossek.
The commodity driver for much of the past decade’s emerging market growth continues to stall. Does this mean the door is opening quicker for those emerging markets that are commodity importers? And is the emerging market story, therefore, all about Asia?
Emerging markets equities have outperformed the developed world by around four percentage points since mid-February.
It has been the question probably most frequently asked by investors over the past few years: should I increase my allocation to emerging markets now? Often the answer has been negative as short-lived rallies have failed to sustain themselves. Will this time be any different?
