2012 Global Outlook on Emerging Markets
Executive Summary
- Increased levels of volatility have enveloped global equity markets in the second half of 2011. Contagion in the euro zone and fiscal uncertainty in the US have weighed on stock prices and future growth prospects globally.
- Inflationary pressures have abated across emerging market countries on the back of a slowdown in global growth. Food and commodity prices have fallen from their early 2011 peaks, which has resulted in a drop in consumer and producer prices.
- In anticipation of weaker demand and slower growth from developed markets, central banks in emerging market economies have begun to loosen monetary policy. We expect this trend to continue into the first half of 2012, as the macro environment remains unclear.
- Valuation remains attractive across emerging market equities, relative to their developed market counterparts. Price-to-earnings ratios are below long-term historical averages and close to 2008 lows.
- Emerging market equity fund flows, while negative for the year, are likely to reverse course modestly in 2012 given attractive valuation and resilient economic growth in the region, although risk appetites will remain suppressed until a clearer resolution of the euro zone debt crisis materializes.
Risks: Investing in international markets may involve additional risks, such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. In addition, single-country and sector funds may be subject to a higher degree of market risk than diversified funds because of concentration in a specific industry, sector or geographic location. Investing in small- and mid-size companies is more risky than investing in large companies as they may be more volatile and less liquid than large companies. Emerging market investing may be subject to additional economic, political, liquidity and currency risks not associated with more developed countries.
Mirae Asset Global Investments (USA) LLC is the investment advisor for the Mirae Asset Discovery Funds.
You should carefully consider the investment objectives, risks, charges and expenses of the Mirae Asset Discovery Funds before making an investment decision. A prospectus with this and other information about the Funds may be obtained by visiting miraeasset.com or by calling 888-335-3417. Please read the prospectus carefully before investing as it explains the risks associated with investing in international markets.
The views and information discussed in this report are as of the date of publication, are subject to change and may not reflect the current views of the writer(s). The views expressed represent an assessment of market conditions at a specific point in time, are opinions only and should not be relied upon as investment advice regarding a particular investment or markets in general. Such information does not constitute a recommendation to buy or sell specific securities or investment vehicles. It should not be assumed that any investment will be profitable or will equal the performance of the portfolios or any securities or any sectors mentioned herein.
The subject matter contained herein has been derived from several sources believed to be reliable and accurate at the time of compilation. Mirae Asset Global Investments (USA) LLC does not accept any liability for losses either direct or consequential caused by the use of this information.