Overall, we think investors should hold EM allocations in line with policy targets. But periods of volatility and equity market dislocations often present opportunities for investors to add value through tactical portfolio tilts.
This note provides an update on the current opportunity set in infrastructure investments and highlights some of our preferred areas in the private space, including energy transition and digital infrastructure.
Yes. Emerging markets equities provide a fitting reminder that relative performance among asset classes varies over time, suggesting that investors maintain well-diversified portfolios to weather shifts in performance cycles.
Most risk assets enjoyed strong returns in fiscal year ended June 2024. Developed markets equities led on better-than-expected economic data and the anticipation that central banks would begin easing monetary policies.
No. Although emerging markets stocks typically outperform after the onset of Federal Reserve easing, we suspect this episode will be different.
Risk assets enjoyed mostly positive returns in CY 2023. Developed markets equities led as fears over the severity of a possible recession moderated and inflation declined.
The shifting geopolitical realities between the United States and China have already impacted trade and investment flows. In this two-part series of VantagePoint, we review this reality and consider investment implications alongside those of other key factors—such as domestic structural developments, macroeconomic conditions, and valuations. In Part I, we focused on opportunities in China specifically. In this companion piece, we discuss investment opportunities beyond China.
This chart book examines historical currency momentum, valuation, and fundamentals in nine key currencies—US dollar (USD), British pound (GBP), euro (EUR), Swiss franc (CHF), Japanese yen (JPY), Australian dollar (AUD), New Zealand dollar (NZD), Canadian dollar (CAD), and Singapore dollar (SGD)—to help investors understand how these currencies behave against other major currencies.
Risk assets enjoyed mostly positive returns in fiscal year 2023. Equities rebounded as fears over the severity of a possible recession moderated. Emerging markets equities lagged developed markets as the pace of reopening in China disappointed. Bond performance improved as credit assets posted positive returns but developed markets sovereign bonds struggled. Real assets suffered due to higher interest rates and slowing demand.
The 2022 Emerging Markets edition of our annual report on the history of financial markets provides context for the range of returns investors can expect from equities, bonds, and cash; reveals the importance of various components of equity returns; examines the evidence for equity mean reversion; and reviews the relationship between initial valuations and subsequent returns for equities and bonds.