Investors looking to gain exposure to EM cannot overlook China with MSCI China Index outperforming MSCI EM ex China Index dramatically. However, the country has unique challenges as well – a way forward to confronting these challenges is to be selective and to stick with quality names.
After several tumultuous months, emerging market equities are rebounding. In this piece, members of our fundamental active equities team share seven key points about emerging markets (EM) that are shaping their EM equities portfolio right now.
Global financial markets have shown signs of settling down after the deep sell-off of risk assets as a result of pandemic-driven economic concerns and the subsequent sharp rebound.
Policy-makers in China changed policy direction by implementing new security measures in Hong Kong and removing a target for GDP growth. These economic cum political decisions should continue to make Chinese assets attractive for global investors, though they could pose a relative headwind for other Emerging Markets. Yet, market dynamics will depend more on how DM countries manage their exits from lockdown.
Success in EM investing requires recognizing how companies and countries are evolving during the COVID-19 pandemic. We assess market liquidity, corporates’ flexibility to change and valuations to identify opportunities.
The COVID-19 pandemic represents both a serious public health and economic threat for emerging markets. The crisis has dented emerging market growth prospects and reversed years of strong performance.
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