Fidelity: What emerging markets can bring

By: Trademagazin Date: 2023. 08. 07. 13:55

In periods characterized by market volatility, it is easy to forget about the attractiveness of emerging markets. However, now, when valuations are at a low point not seen for several decades, it may be especially worthwhile to gain exposure to emerging market stocks. Fidelity’s experts listed the arguments in favor of the asset class one after the other.

Again, there is a growth premium, but its distribution will not be even

Emerging market stocks have previously offered an attractive growth premium compared to developed countries. Although the glow of the growth story has worn off a bit recently, China’s reopening and higher commodity prices — along with more stable budgets, peak interest rates and a weaker dollar — are signs that better days are ahead.

According to the IMF, Asia will generate 70% of global growth this year. Consumption will play a key role, as weak demand in other regions will be offset by recovering Chinese consumers.