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Reasons to be Positive on Emerging Markets

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Reasons to be Positive on Emerging Markets

•  Emerging market equities have outperformed developed market equities since the beginning of the year.

•  Economic growth rates in the emerging markets are, once again, accelerating and diverging from developed markets.

•  Emerging markets are trading at a discount relative to developed markets, offering compelling valuations to investors.

•  Emerging markets outperformed developed markets in three out of the past four U.S. Fed rate hiking cycles.

Investment Considerations — There can be no guarantee that any strategy (risk management or otherwise) will be successful. All investing involves risk, including the potential of 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, legal and economic structures in these country 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.

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