Emerging markets have outperformed developed markets by a stellar 8% this year. In this video, Neal Smith talks about the attractive opportunities offered by emerging markets.
Read the transcript of this video below.
What’s been happening in the global emerging markets?
2017 has seen a strong start to the year for emerging market performance, delivering a return of approximately 17% in US dollars. This represents an approximate 8% outperformance of developed market equities. Within this, Asia has been a strong performer, with markets such as Korea, China, India and Taiwan performing strongly. Markets that underperformed include the likes of Russia in particular, as well as Brazil and South Africa. These underperforming markets have been hit by macro factors such as political instability and resource price pressure, particularly oil prices.
How have the markets affected your investment decisions?
Here at Denker Capital, we follow a bottom-up approach to investing. We’ve used the opportunity created by the volatility in these underperforming markets and regions to allocate capital to great investment opportunities.
Are you still in favour of investing in emerging markets going forward?
We believe the investment case for emerging markets is intact. Emerging markets materially outperform developed markets over time and all the structural drivers that deliver that performance have reasserted themselves. Valuations for emerging markets are exceptionally attractive, and from a global opportunity set emerging markets stand out as a great opportunity.
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Source of performance figures for emerging markets: Factset (year-to-date return).