In recent months, investors have been looking overseas for opportunities in emerging markets (EMs).
While some market watchers are speculating that the allure of developing markets may be fading given the prospect of higher rates on the horizon, many investors are still embracing the emerging world. BlackRock Chief Investment Strategist Russ Koesterich noted that sentiment continues to turn for EMs in his latest Market Perspectives, pointing to China as one of the best performing markets in recent months as a result of improving economic data.
What’s more, the latest flow data indicates that EM equity posted a sixth consecutive month of inflows in August, gathering $4.2 billion; broad EM, including frontier markets, posted a fifth consecutive month of inflows, totaling $1.8 billion in August.
Russ advocates a benchmark position to EMs along with a selective approach. For most investors, who have largely underweighted the asset class, this means increasing allocations.
Some potentially attractive entry points do exist but continued volatility is to be expected. You can compare individual emerging market countries by exploring three key considerations – performance, valuation and economics – with the interactive Emerging Markets Marker from BlackRock’s Investment Institute.
Click here or on the image below to launch the interactive chart.
For more insights from the BlackRock Investment Institute, click here.
Heidi Richardson is a Global Investment Strategist at BlackRock, working with Chief Investment Strategist Russ Koesterich. She is the newest contributor to The Blog.
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.
This material represents an assessment of the market environment at a specific time and is not intended to be a forecast of future events or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding the funds or any security in particular.