“A slowdown in Fed tightening, and even more so a reversal in policy, would give emerging markets a boost. Looser monetary policy from the Fed usually leads to lower rates and a weaker dollar, both of which can boost emerging-market exports to the U.S.,” according to CNBC.
Compelling valuations could lure investors back to emerging markets equities and the related ETFs.
“While this year’s plunge may have been painful for emerging-market investors, it did make EM stocks far more attractive on a valuation basis. This year’s losses pushed the EEM’s price-to-earnings ratio — a widely followed valuation metric — down to 11.41, its lowest since February 2016,” reports CNBC.
For more information on global markets, visit our global ETFs category.