The financial media has been all over the story that Emerging Market’s are now no longer an attractive investment destination. And how can we disagree with GDP growth declining throughout the region, fund flow into European equities and fixed income continuing to accelerate and the US Dollar continuing on its tear. When the Fed first hinted about rate hikes in May 2013, we saw a huge sell off by investors throughout the region, so naturally the question is will we see a part deux of this occurring in September ’15? Or has this already been priced in?

There are several questions percolating in my mind at the moment and one chart I find most interesting from the article is the one below, would it be unreasonable to think that all currencies (or lets just say SE Asian ones b/c those I know) will return to ’06-’07 levels pre-QE spending? I don’t think so and then as a result of this, how should those of us involved in equities manage the portfolios..especially if you’re coming from a USD perspective?



Anyways onto the article, here are some snippets and link to the rest of the it.

  • Yet a confluence of powerful forces — notably a strong dollar, weak commodities prices, China’s slowdown and higher U.S. rates — will, at minimum, bridle growth.
  • The IMF still expects the world’s emerging economies to grow 4.2 percent this year, even as Brazil and Russia sink into recession. But that’s only 0.9 percentage points faster than the world economy as a whole, the smallest gap since 1999.
  • Granted, emerging economies are in far better shape than they were when past crises hit. While many companies have taken on debt, governments overall have reduced borrowing relative to their economies.

Source: Bloomberg

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