Investors are also exhibiting a greater preference for international stocks, including emerging market equities. So far this year, investors have dumped $1.1 trillion in to emerging market assets, the largest flow of funds in three years, according to the Institute of International Finance. Observers also project the flows to continue unabated and gather another $1.2 trillion next year.
Meanwhile, the fundamental economic growth story remains, with all 45 countries monitored by the Organization for Economic Cooperation and Development on track to expand this year, something that has only occurred three times in the past half century.
“Emerging markets can grow even if the Fed is hiking, provided that growth is playing ball. And right now, it is” Stuart Sclater-Booth, emerging markets debt portfolio manager at Stone Harbor Investment Partners, told the WSJ.
Looking ahead, the International Monetary Fund expects the emerging countries as a whole to expand 4.9% to 2018, compared to 4.6% this year, and more than double the growth rate of developed economies.
For more information on the developing economies, visit our emerging markets category.