Schvets: Emerging markets stuffed

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Viktor Schvets of Macquarie with another superb note. I agree with this 100%:

EMs are likely to continue delivering lower returns with higher vols

  • Next month marks the 11th anniversary of the highest relative peak of EM vsDM equityperformance. Powered by the post-GFC recoveryand China stimuli, EMs were resting at double the levels of’04. It was a legacy of seven years of relatively uninterrupted EM outperformance. It is not surprising therefore that having lost ~50% of relative value over the last decade and ~17%YTD, EM investors feel that their time is finally coming back. We continue to disagree.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.