Macrobond Financial’s Post

Great piece by Trevor Yates! Key Takeaways ·        Emerging market equities have shown strength even in the face of “higher for longer” interest rate expectations, and we think the momentum can continue. ·        Global economic growth is accelerating, and EMs could be outsized beneficiaries due to their exposure to commodities, manufacturing, and industrials. ·        The cyclical tailwind we see for EM equities will likely outweigh interest rate volatility, but interest rate cuts by the U.S. Fed could provide an additional catalyst for multiple expansion. Global X ETFs Mirae Asset Global Investments #emergingmarkets #commodities #investing https://lnkd.in/e4XvtjG4

Are emerging markets ready for a breakout, or is it time to stay selective? Portfolio Manager David Ruff breaks down the impact of the Fed’s interest rate cuts and what it could mean for EM debt and equities. Learn more: https://bit.ly/4dpuh49 #EmergingMarkets #InvestmentStrategy

Given the recent talk about how cheap emerging market equities are compared to US equities, I am sharing two insights that stuck with me from our investment team's article from Q4 of last year: (1) Emerging market equities have outperformed/kept pace with U.S. and global developed markets indices since the inception of the MSCI Emerging Markets index in 1999 (2) Emerging markets aren’t uniform; they vary in market structures, economic drivers and development stages, and should be analyzed separately https://lnkd.in/gEK8z5XG #markets #emergingmarkets #equities #valuation

Are Emerging Markets 𝐄𝐦𝐞𝐫𝐠𝐢𝐧𝐠?   The historical average weight of 𝐄𝐦𝐞𝐫𝐠𝐢𝐧𝐠 𝐌𝐚𝐫𝐤𝐞𝐭𝐬 in the MSCI ACWI is 11-13%.   From post-pandemic highs of ~13% it is now ~9%*. Countries like China, Taiwan, India, Brazil, S. Korea & even Thai, Turkey and UAE are amongst those classified as emerging markets. Those countries have also raised high interest recently, 𝐥𝐞𝐚𝐝𝐢𝐧𝐠 𝐭𝐨 𝐢𝐧𝐟𝐥𝐨𝐰𝐬 𝐨𝐟 >$20𝐛 𝐭𝐡𝐢𝐬 𝐲𝐞𝐚𝐫 𝐚𝐥𝐨𝐧𝐞. To my surprise, active EM equity funds manage ~$400bn in AUM globally, a great testimony that investors are interested in 𝐚𝐜𝐭𝐢𝐯𝐞𝐥𝐲 𝐦𝐚𝐧𝐚𝐠𝐞𝐝 𝐄𝐌 𝐞𝐱𝐩𝐨𝐬𝐮𝐫𝐞. As I always say - 𝘵𝘩𝘦𝘳𝘦 𝘪𝘴 𝘢𝘯 𝘢𝘥𝘥𝘦𝘥 𝘷𝘢𝘭𝘶𝘦 𝘱𝘪𝘤𝘬𝘪𝘯𝘨 𝘢𝘯 𝘢𝘤𝘵𝘪𝘷𝘦 𝘮𝘢𝘯𝘢𝘨𝘦𝘳 𝘪𝘯 𝘤𝘦𝘳𝘵𝘢𝘪𝘯 𝘮𝘢𝘳𝘬𝘦𝘵𝘴 𝘢𝘯𝘥 𝘢𝘴𝘴𝘦𝘵 𝘤𝘭𝘢𝘴𝘴𝘦𝘴. 𝐒𝐨, 𝐰𝐡𝐲 𝐡𝐚𝐯𝐞 𝐄𝐌 𝐫𝐚𝐢𝐬𝐞𝐝 𝐢𝐧𝐭𝐞𝐫𝐞𝐬𝐭: 1️⃣ 𝐕𝐚𝐥𝐮𝐚𝐭𝐢𝐨𝐧𝐬: EM stocks are trading at a historical low compared to the S&P 500, offering compelling entry points for investors. EM index is trading at 12.6x expected earnings - ~40% lower than the S&P 500's 21.6x. 2️⃣ 𝐃𝐨𝐥𝐥𝐚𝐫 & 𝐅𝐞𝐝: The Federal Reserve's interest-rate cuts and a weaker U.S. dollar are giving emerging markets room to breathe. This shift could help emerging market stocks outperform. 3️⃣ 𝐁𝐚𝐜𝐤 𝐭𝐨 𝐆𝐫𝐨𝐰𝐭𝐡: Emerging markets are bouncing back from earnings declines, with expected earnings growth rates of 15%+ in 2024-2025, compared to around 11% in the U.S. 4️⃣ 𝐌𝐨𝐧𝐞𝐭𝐚𝐫𝐲 𝐏𝐮𝐬𝐡: In order to help boost economic growth, some EM countries have changed their narratives to easing monetary easing. Let me know in the comments 👇 - 𝐈𝐬 𝐲𝐨𝐮𝐫 𝐩𝐨𝐫𝐭𝐟𝐨𝐥𝐢𝐨 𝐞𝐱𝐩𝐨𝐬𝐞𝐝 𝐭𝐨 𝐄𝐦𝐞𝐫𝐠𝐢𝐧𝐠 𝐌𝐚𝐫𝐤𝐞𝐭𝐬?   𝘛𝘩𝘪𝘴 𝘱𝘰𝘴𝘵 𝘪𝘴 𝘧𝘰𝘳 𝘪𝘯𝘧𝘰𝘳𝘮𝘢𝘵𝘪𝘰𝘯𝘢𝘭 𝘢𝘯𝘥 𝘥𝘪𝘴𝘤𝘶𝘴𝘴𝘪𝘰𝘯 𝘱𝘶𝘳𝘱𝘰𝘴𝘦𝘴 𝘰𝘯𝘭𝘺 𝘢𝘯𝘥 𝘴𝘩𝘰𝘶𝘭𝘥 𝘯𝘰𝘵 𝘣𝘦 𝘤𝘰𝘯𝘴𝘵𝘳𝘶𝘦𝘥 𝘢𝘴 𝘧𝘪𝘯𝘢𝘯𝘤𝘪𝘢𝘭 𝘰𝘳 𝘪𝘯𝘷𝘦𝘴𝘵𝘮𝘦𝘯𝘵 𝘢𝘥𝘷𝘪𝘤𝘦. *𝘢𝘴 𝘰𝘧 𝘦𝘯𝘥 𝘚𝘦𝘱 2024 #Investments #EmergingMarkets #Equity

International equities performed strongly again in June driven by US Mega-tech stocks. Emerging markets performed well also.....Find my quick snapshot review of market events in June below.....

Underweight EM? You're not alone! This week, we’re analyzing Emerging Market allocations among Global equity funds. In this brief video, I’ll walk you through 3 key charts from our latest analysis. Here’s the quick summary: • The average EM allocation sits at the lower end of its 10-year range at 7.05%. While this level has remained relatively stable since 2022, the net underweight has improved from the lows of -4.5% to -3.3% today. • China has been the primary driver behind the long-term decline in EM exposure, with average weights more than halving since late 2020. In contrast, Taiwan's weight has been steadily increasing, reaching a peak of 1.76% today.  Country rotation within EM is a key theme in our analysis. • From a style perspective, Emerging Markets have shifted from a Growth to a Value play. Value managers now allocate an average of 9.5% to EM, compared to 5.9% for Growth funds. However, all style groups remain underweight, leaving the majority of managers vulnerable to EM outperformance. If you’re keen on staying ahead of market trends and tracking positioning across global markets, be sure to subscribe, follow, or like this video for more. #activemanagement #emergingmarkets #investing #stockmarkets #china #assetmanagement

Recent analysis from Franklin Templeton Institute supports the idea that emerging markets are now offering the best combination of forward earnings and valuations. Over the past 15 years, US stocks have outperformed in terms of performance and earnings growth, but the landscape is changing. Emerging markets are projected to have the strongest earnings growth in the coming years. Valuations also suggest that it's time to consider greater exposure to emerging markets, as they appear undervalued compared to the US, Europe, and Japan. This presents an opportunity for investors to potentially find better performance potential and lower valuations in emerging markets. Read the full article from our Key Alliance Partner, Franklin Templeton , in this month's On-Demand Content feature: https://bit.ly/460aTbU View all of July's On-Demand Content here: https://loom.ly/NRzYQwE #Investing #EmergingMarkets #EarningsGrowth #Valuations #FranklinTempletonInstitute

Emerging markets with young, growing workforces are primed for explosive economic booms. VettaFi's new suite of Demographic Dividend Growth Indexes target these future powerhouses, offering you unique product opportunities. Want to access exposure to this new #index suite? Brian Coco shares how: https://lnkd.in/g3ytQ79t #AssetManager #Indexing #AssetManagement

🌍 Emerging Markets: The Comeback Kid of 2024? Attention investors! Are you ready to ride the wave of potential in emerging markets? Here's the scoop: 📊 The numbers don't lie: MSCI EM target: 1175 (That's a juicy 14% total return in USD!) EM earnings growth forecast: Mid-teens (Talk about a growth spurt!) 🎭 The players to watch: Korea, South Africa, and India (fashionably late to the rate-cutting party) ASEAN and Mexico (historically hot after Fed cuts) Korea and Taiwan (global cyclicals ready to cycle up) 🔑 Key factors for success: Lower US real rates (EM stocks love a good rate drop) Steepening yield curve (The steeper, the better!) Weaker USD (Dollar down, EM up - it's like financial see-saw!) 👀 What to look out for: Long-duration stocks (Tech, healthcare, consumer discretionary - the longer, the stronger!) "Late-cutters" vs "early-cutters" (Patience pays off in the EM game) Remember, past performance doesn't guarantee future results, but it sure makes for an interesting story! Are you considering increasing your EM exposure? Let's discuss in the comments! #EmergingMarkets #InvestmentStrategy #GlobalEconomy #FinancialMarkets

Emerging Markets have lagged Developed Market equities, is a reversal on the cards? Over the last 10 calendar years EM has only outperformed DM 30% of the time and the 10-year return is around a third of DM. An improving macro picture with a weaker Dollar could drive better returns in EM. And of course, valuations for EM are supportive given their low relative multiples. #parmenioninvestment #emergingmarkets