The Great Moderation was a period of macroeconomic growth and reduced volatility that provided a backdrop to the strong performance of U.S. equities. The lessons hold relevance for equity investors in Asia as big picture conditions for a Great Moderation are starting to fall into place. We believe the “new moderation” mindset will take Asia
For many investors, emerging market debt could be viewed as a core-portfolio holding rather than a short-term tactical investment. 2013’s re-pricing created value in terms of higher yields, a more dedicated investor base and a better relative value argument. Flexibility across the full spectrum of EMD investment opportunities is extremely important, as emerging markets are
The expected real return on most “safe haven” assets is currently negative. Risk seeking behavior could result in a bubble encompassing all risky assets. While current indicators support a pro risk stance, we are prepared to change our positioning as market conditions dictate. There is a great deal of discussion currently about the likely emergence
Despite continuing headlines of concern, EM markets have rebounded recently. In order to sustain that rally, we need to see progress on export volumes and political/economic reforms. While not universally cheap, EM equity valuations are not unreasonable and we continue to find bottom-up opportunities. A month ago, much of the news from the emerging markets
Exports by emerging market economies are the most important factor in explaining long-term growth. EM exports have remained sluggish for the past three years due in part to the subpar nature of global growth. As emerging markets struggle to overcome the challenges to their growth story, the EM landscape will likely face significant challenges ahead.
Business, economic and political news all point to a strengthening recovery in Europe. We foresee a period of low inflation and low interest rates in Europe. We favor domestic European plays over internationally-exposed stocks, with an overweight stance in banking and telecoms. By Paul Doyle, Head of Europe ex. UK equities and Frederic Jeanmaire, Fund
To date, the fallout from the Ukrainian crisis has been largely confined to the emerging market debt, emerging market equity and commodity markets. At current levels, emerging market local currency debt appears to offer value, although we expect both the hard and local currency markets to remain volatile in the short term. Emerging equities reflect