EM Outlook: May 2019
Updated Emerging Market Investment Outlooks
Emerging market economies are inherently more volatile than developed markets. In today's interconnected world, this means that the outlook for emerging markets can change quite quickly. Lately this is perhaps best evidenced by the ebb and flow of amendments to ongoing trade negotiations between the United States and China, and their resulting market-related implications.
Below we've endeavored to bring you the latest updates on the outlook for emerging markets, whether they are related to the particulars of the US-China trading relationship, the Chinese A-share market, the opportunities resulting from the demographic trend of mass urbanization in emerging market economies, EM debt, or other related issues.
The Future of Emerging Markets: 30 Years of the MSCI EM Index (Apr 2019)
Over 30 years on from the launch of their Emerging Markets Index in late 1987, MSCI discusses the evolution of emerging markets, the benefits of risk/return and portfolio diversification conferred to global equity investors, and the ongoing inclusion of Chinese A shares.
China A-Shares: Perspective from the Inside Out (PineBridge, May 2019)
PineBridge discusses the uniqueness of the China A-shares market in terms of risk, alpha, and the present-day opportunity set for international equity investors.
Upcoming Urbanites: Urbanization drives major economic shifts (Nuveen, Apr 2019)
Nuveen describes alternative investment opportunities in agriculture, infrastructure, impact investing, and real estate that have arisen as a result of mass urbanization.
Emerging Markets Equity Spotlight (Lyxor ETF, Apr 2019)
For compliance reasons, this paper is only accessible in the UK & Europe
The Lyxor ETF EM Equity Spotlight report is a 40 page document providing a comprehensive overview of the characteristics of emerging market equity indices, including an examination and comparison of sector exposures and country exposures.
China: A spotlight on standalone allocation (UBS AM, 2019)
How can investors capture China's growth story? Practitioners at UBS Asset Management describe why a standalone allocation might be worth considering.
EM Debt Chart Book, Q1 2019 (Eaton Vance)
For compliance reasons, this paper is NOT accessible in the United States and Canada
Eaton Vance presents this 59-page quarterly chart book on emerging markets debt, with insight into both sovereign and corporate credit, as well as other economic and market data affecting EM debt markets in Q1.
Implications of a U.S.-China Trade Deal: Who Wins? Who Loses? (PGIM Fixed Income, Apr 2019)
Would a trade agreement between the U.S. and China on trade help to open the Chinese economy to foreign investment? How would gains accrue to the rest of the world from such an agreement?
China's Precarious Balancing Act (Aviva Investors blog, Apr 2019)
For compliance reasons, this paper is only accessible in certain geographies
Chinese growth fell to a three-decade low last year, but the country is ratcheting up its efforts to stabilise the economy. Yet by piling on more leverage, is Beijing merely kicking the can down the road?
The challenge of investing sustainably in sovereign debt (Fidelity Intl blog, Apr 2019)
For compliance reasons, this paper is only accessible in the UK & Europe
It is much more difficult to engage with governments on sustainability/ESG issues than it is to engage with corporate entities, but doing this well has the potential to foster stronger economic growth for the sovereign issuer, as well as positive alpha for investors.
China's Century? The Economic Giant's Next Act (Franklin Templeton, Mar 2019)
For compliance reasons, this paper is only accessible in the EMEA region
China is at a critical inflection point. There is increased potential for market volatility due to the many challenges the country faces. Growth could slow further due to de-risking activities. But the overall outlook remains positive, as today's reforms should serve to buttress tomorrow's Chinese economy.
How smart beta strategies work in the Chinese market (S&P Dow Jones Indices, 2019)
S&P Dow Jones Indices examines the behavior of 6 of the most well-known factors in the Chinese equity market over a 12-year period in order to provide further insight to current and potential EM smart beta investors.
EM local currency bonds: investing in frontier markets (Capital Group, Mar 2019)
For compliance reasons, this paper is only accessible in certain geographies
The idiosyncrasies of frontier markets may offer unique opportunities for informed investors. The authors discuss the specific challenges that exist within frontier local currency markets.
Uniting positive change with performance in emerging markets (Eaton Vance, 2019)
For compliance reasons, this paper is only accessible in the United States and Canada
To help ensure that companies exert a positive impact on the world, including the bottom line, we believe that investors need to do more than assess ESG risks; they must engage.
Emerging markets: the silver lining for insurers (Swiss Re Institute, Jan 2019)
The economic power shift from western countries to eastern countries is likely to continue, and as a result, emerging markets should be the prime drivers of growth for the global economy throughout the next decade. Our models indicate that within 10 years, EM countries will comprise 60% of global growth.
Governance in Emerging Market Private Capital (EMPEA, 2019)
Through a structured exploration of corporate governance and business integrity topics at the fund, fund manager, and portfolio company levels, this paper provides guidance on key considerations that industry participants should consider.
