2020 Emerging Markets Outlook: Navigating Opportunities
- Emerging market equities show significant growth potential in 2020. We believe that prices have dislocated from fundamentals and that emerging market equities are positioned for a rally in the coming year.
- Asia ex-Japan: We believe the emerging Asian region will continue to perform well in 2020 due to reduced US-China trade tensions and an improving global growth outlook. China’s GDP growth rate will likely moderate in the coming years; however, high consumer confidence and aspirational consumers should continue to drive ample investment opportunities across the e-commerce, entertainment, education and healthcare sectors.
- Latin America: We are optimistic that Latin America can accelerate moderately into 2020 led by its largest economy, Brazil. Brazil has successfully implemented key reform pillars to help drive growth.
- Eastern Europe, Middle East & Africa (EEMEA): EEMEA contains a wide-range of opportunities based on valuation, growth, economics, and politics. We see opportunities for outperformance in Russia, Egypt and Greece, driven by a combination of attractive valuations and macroeconomic tailwinds.
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.