Compelling Opportunities in Emerging Markets
Emerging market (EM) equities show significant growth potential in 2020. Structurally, the asset class looks attractive, with EM equities trading at a discount to developed market equities. We believe that prices have dislocated from fundamentals and that EM equities are positioned for a rally in the coming year. The backdrop for this convergence should come in the form of a tepid US dollar, a US-China trade resolution, a managed Brexit, low interest rates, and steady US growth.
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.