The stars are aligning for emerging market equities

Last year was a tough 12 months for emerging market (EM) equities. The MSCI EM Index fell by 20% in US dollar terms over the full year, battered by the Russia-Ukraine conflict, an unexpected COVID-19 resurgence in China and tightening US monetary policy.

Now, we see reasons to be optimistic. While these issues are not fully behind us, we feel that the stars are aligning for the asset class.

1. FALLING INFLATION ALLOWS EM CENTRAL BANKS TO CUT AGGRESSIVELY: Consumer price indices are falling across the world. The major issues of supply chain constraints, high shipping and energy costs and commodity scarcity seem mostly resolved. Within EM, Latin America and EMEA inflation rates rose dramatically in the second half of 2021 and into the first half of 2022.

Fidelity Emerging Markets Limited (LON:FEML) is an investment trust that aims to achieve long-term capital growth from an actively managed portfolio made up primarily of securities and financial instruments providing exposure to emerging markets companies, both listed and unlisted.

Click to view all articles for the EPIC:
Or click to view the full company profile:
Facebook
X
LinkedIn
Fidelity Emerging Markets

More articles like this

Fidelity Emerging Markets

Emerging Markets shaping global economic growth

Emerging markets are expected to drive nearly two-thirds of global economic growth by 2035, marking a significant shift in the world economy. According to S&P Global’s latest Look Forward research study, these markets will play a

Fidelity Emerging Markets

Emerging Markets: Is a recovery on the horizon?

Take yourself back to the aftermath of the most severe financial crisis since the Great Depression, 15 years ago. The financial world, crippled by a US-led credit and housing bubble, was being revived in part by

Fidelity Emerging Markets

Is now the right time to invest in Emerging Markets?

A growing interest in emerging markets has often attracted investors due to their potential for rapid growth and diversification. However, these markets have also brought challenges, including volatility and structural risks, which have resulted in significant

Fidelity Emerging Markets

Emerging markets gain amid resilient US jobs data

Emerging market stocks saw gains on Monday, tracking the movement of global equities. The MSCI emerging market stock index rose by 0.4% as of 0815 GMT, buoyed by significant advances in Hong Kong and Taiwan, which

Fidelity Emerging Markets

Should investors reconsider Emerging Markets?

Emerging markets have faced significant criticism over the past decade. A stronger dollar, declining commodity prices, and sluggish corporate income growth were key factors driving this scepticism. As a result, investments in these markets have delivered

Fidelity Emerging Markets

Emerging Markets gain momentum as US rate cuts approach

Emerging markets (EM) are gaining attention from capital markets as the likelihood of U.S. Federal Reserve rate cuts grows. With rate cuts on the horizon, traders are seeing new opportunities in the EM space, where profitable

Fidelity Emerging Markets

Emerging market assets rally as US dollar dives

The optimism surrounding the upcoming Federal Reserve decision has sparked a surge in emerging market assets, with investors increasingly hopeful of a significant interest rate cut. The anticipation of a 50 basis point reduction has driven

DirectorsTalk

Emerging Markets: Driving global growth

Emerging markets are increasingly playing a critical role in defending against global economic fragmentation, especially as advanced economies adopt more inward-looking policies. Once seen as developing countries with high growth potential, these markets have matured significantly,

Fidelity Emerging Markets

Emerging Markets need strong fundamentals for stability

Economists Donghyun Park and Irfan A. Qureshi from the Asian Development Bank (ADB) explore the factors that help emerging markets maintain financial stability and promote sustained economic growth, even as they navigate the challenges posed by