Displaying items by tag: EMs

Emerging market assets often witness significant yet brief fluctuations around Election Day, with their performance linked to the electoral outcome. Historical data suggests that emerging market assets fare better during periods of a unified US government or with a Democratic president. However, this data is limited, spanning only eight presidential election cycles. 

To gauge this year's potential impact on emerging markets, it's crucial to analyze key channels of influence, including changes in US macroeconomic variables, trade policy, and geopolitics. The outcome of the US election could significantly affect these factors, influencing emerging market assets. Trump's presidency might lead to faster US economic growth but increase uncertainty in trade and geopolitics, while a Biden presidency could maintain the status quo. 

Despite political considerations, long-term portfolio construction should remain impartial, with emerging market assets playing a pivotal role due to their diversification benefits and potential for higher returns. 

Finsum: Don’t let political biases crowd out your investment decisions.

(Beijing)

Much of the attention has been on the Fed and how they will respond to the U.S. economy, but…see the full story on our partner Magnifi’s site.

(Beijing)

China is a growing region that is at the forefront of everyone’s minds, but many investors don’t know how to capitalize…see the full story on our partner Magnifi’s site

(New York)

For many years, emerging markets were a must-have in every investors’ portfolio. The idea was that a large swath of the world was on an inevitable path towards economic parity with the west, and that there was a great deal of money to be made by investing in that growth. For several years, that view held. However, changes over the last decade mean that such a thesis is increasingly in doubt as many of the factors that drove EMs have fallen away. In the words of the Financial Times, “high commodity prices are a fading memory. Trade is stuttering and global supply chains are being disrupted. Far from catching up with the developed world, many supposedly emerging markets are growing more slowly”.

FINSUM: It is not just economic either. Governments have not cleaned up as fast as many had hoped, which means the law and governance aspect of EMs has hardly improved.