Volatility should bring dispersion back to emerging markets, creating new opportunities to invest in assets at attractive valuations. Read more...
Markets across the world are braced for a new era of volatility, with emerging markets (EM) likely to be particularly affected.
This is likely to bring dispersion back to EM equity and debt markets, creating new opportunities to invest in assets at attractive valuations—for investors with the insight and resources to identify them.
For investors in both EM equity and debt, there are many idiosyncratic local risks to consider in addition to broader, market-wide ones. While we agree with the consensus view that Turkey is a major risk at present, we think that concerns about Mexico, Brazil, and Russia may be overdone.
The period ahead will be challenging—the ability to be highly selective, and change positions quickly, may prove to be a very useful attribute.