What’s behind the inflows? Stabilization in China and other EM economies is providing some comfort to EM bargain hunters. Further helping sentiment is a shift toward a more dovish stance by some EM central banks, after an earlier round of tightening had ignited growth concerns. Finally, if nothing else, I read the EM inflows as a sign of investor awareness that stocks in the developed world are looking pricey.
To be sure, these aren’t the only market segments offering good value, but they’re ones many investors overlook. To read about other areas of the market also offering good relative value, check out my latest Investment Directions monthly market outlook.
Sources: BlackRock, Bloomberg, Citi Investment Research
Russ Koesterich, CFA, is the Chief Investment Strategist for BlackRock and iShares Chief Global Investment Strategist. He is a regular contributor to The Blog and you can find more of his posts here.
International investing involves risks, including risks related to foreign currency, limited liquidity, less government regulation and the possibility of substantial volatility due to adverse political, economic or other developments. These risks often are heightened for investments in emerging/ developing markets or in concentrations of single countries.