Mirae Asset Global Investments Releases 2014 Emerging Markets Mid-Year Update
Emerging markets expert addresses performance, politics and policy in 2014 for select emerging economies
July 24, 2014
Mirae Asset Global Investments (“Mirae Asset”) published their 2014 Emerging Markets Mid-Year update today. The twenty page report, authored by the firm’s senior investment team led by CIO José Gerardo Morales, CFA, reflects back on the first half of the year, in addition to providing insights for various regions for the remainder of 2014. http://investments.miraeasset.us/EMUpdate
The report states that emerging market equity performance has differed somewhat from consensus predictions. Emerging market equities, as measured by the MSCI Emerging Markets Index, returned 6.1% as of midyear, due to falling US 10-year yields, the relative attractiveness of emerging markets versus European yields, and elections in Turkey, Brazil, India and Indonesia. Mirae Asset contends that the rebound of emerging markets was further helped by the fact that much of the impact of tapering by the Federal Reserve was already seen in the second half of 2013, followed by quick damage-control exercises by the central banks of the “Fragile Five” (Brazil, India, Indonesia, South Africa and Turkey), all of which have outperformed vs. the MSCI Emerging Market Index year to date.
Regional insights include:
- Asia ex-Japan:
- Key economies of China and India show signs of stabilization
- Reforms will be an important part of the underlying story in both countries in the second half of 2014
- Latin America:
- Brazilian equities are likely to remain volatile until October elections, and remain reactive to poll readings and headlines. The Brazilian market may offer upside potential in the event of a politically driven re-rating both before and after the presidential vote.
- Mexico remains an attractive market despite high equity valuations and lagging the region during the first half of the year.
- Eastern Europe, the Middle East and Africa (EEMEA):
- The Euro-area linked economies of Poland, Hungary and the Czech Republic are faring much better thus far, compared with than Russia, South Africa and Turkey.
- The Turkish market is likely to remain volatile, though it offers good opportunities with accelerating growth potential.
- Elections and the actions of central bankers will continue to significantly impact key regions in emerging markets for the remainder of 2014.
- Overall, it remains imperative to retain a selective and active approach to emerging markets as we enter the second half of 2014.
- José Gerardo Morales, CFA: CIO – Mirae Asset Global Investments (USA)
- Young Hwan Kim: Deputy CIO – Mirae Asset Global Investments (USA)
- Rahul Chadha: Co-CIO – Mirae Asset Global Investments (HK)
- Byung Ha Kim: Co-CIO – Mirae Asset Global Investments (HK)
There can be no guarantee that any investment strategy will be successful. All investing involves risk, including the potential loss of principal.
Emerging Markets Risk - The risks of foreign investments are typically greater in less developed countries, which are sometimes referred to as emerging markets. For example, political and economic structures in these countries may be changing rapidly, which can cause instability and greater risk of loss. These countries are also more likely to experience higher levels of inflation, deflation or currency devaluation, which could hurt their economies and securities markets. For these and other reasons, investments in emerging markets are often considered speculative. Similarly, investors are also subject to foreign securities risks including, but not limited to, the fact that foreign investments may be subject to different and in some circumstances less stringent regulatory and disclosure standards than U.S. investments.
Equity Risk - equity investments are more volatile and carry more risk than other forms of investment including investments in high grade fixed income securities.
Geographic Concentration Risk - A small number of companies and industries may represent a large portion of the market in a particular country or region, and these companies and industries can be sensitive to adverse social, political, economic or regulatory developments in that country or region.
Mirae Asset Global Investments (USA) LLC is the investment advisor for the Mirae Asset Discovery Funds.
About Mirae Asset Global Investments
Mirae Asset Global Investments is one of the world’s largest investment managers in emerging market equities*. With over 600 employees, of which 123 are dedicated investment professionals, Mirae Asset offers a breadth of emerging markets expertise from its offices in Australia, Brazil, Canada, China, Colombia, Hong Kong, India, Korea, Taiwan, the U.K., the U.S., and Vietnam. The firm manages over $75 billion in assets globally, of which more than $16 billion is invested in emerging market equities (as of 6/30/15). www.miraeasset.us/press
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