Emerging Markets: Opportunity, Trade or Value Trap?

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EM: Opportunity, Trade or Value Trap?

Emerging Markets: Opportunity, Trade or Value Trap?

Investors who need high return assets to achieve high return targets have increasingly looked to emerging markets (EM).

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The next 12 months may turn out to be a wild ride for emerging market (EM) equities. The macro headwinds look threatening, with rising US interest rates and a strong US dollar.  The global wave of populism and its potential impact on trade flows could bring about a lasting breakout in volatility.

Looking on the brighter side, however, GDP growth in the developing world is starting to accelerate, while developed market (DM) growth will likely stay fairly muted. And we see signs that EM earnings power has stabilized and the underlying micro fundamentals appear quite robust.

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