Getting your EM calls right is now more important than ever
Written by Alex Beveridge
Just how will emerging markets bounce back as the world emerges from Covid? This is one of the key questions exercising the minds of CIOs and senior strategists who I have spoken to as part of research for the European Pensions Symposium/European Investment Roundtable.
For decades, emerging markets have been tipped as the locus for most future global economic growth. Investors have been encouraged to ride that wave.
But it’s been a bumpy journey as emerging market equities and debt have offered sterling results at times, interwoven with step drawdowns and occasional doldrums.
The uncertainty sometimes raises questions about grouping together nations in Latin America, Africa, the Middle East, and Central Europe under a single umbrella.
These countries not only march to different drummers but may be marching in different directions.
And the role of China looms particularly large in this world, as simultaneously being an enormous supplier, a major customer, and a fierce competitor to so many emerging markets.
Investors must ponder which EM investments can hedge a China exposure, and which are essentially surrogates for China risk?
Many investors remain convinced that demography and economics guarantee the bright future foreseen for emerging markets. But the path continues to be rocky. How best to navigate this course?
And then there is the not insignificant matter of ESG. Just how should institutional asset owners measure and implement this in EM portfolios?
The choices facing investors will be defined and debated at Institutional Investor’s European Pension Symposium/European Investment Roundtable, to be held in Copenhagen, September 29th through October 1st, 2021. Leading investors, asset managers, and market analysts will share their views on where, when, and how investors might participate successfully in the bright future that many insist will eventually prevail in the emerging markets.