As 2022 gets underway, advisors may be reevaluating their overall equity allocation. Over the past ten years, Emerging Market (EM) equities trailed U.S. large-cap equities by a significant margin.
Consider that post the 2000 Tech Bubble, EM equities consistently outperformed U.S. large-cap equities.1 So, today with increasing inflation and volatility, are we at a similar inflection point in the U.S. equity markets? What new economic factors could impact EM? This renewed level of uncertainty in the equity markets may cause advisors to question the allocation benefits of EM equities.
GQG partners believes one of the most important benefits of EM equities is the potential to improve the risk/return profile of your clients’ portfolios. According to the International Monetary Fund, developing economies account for an increasing share of global economic growth as the middle-class consumer base grows in these regions, and local companies benefit from expanding IT infrastructure and the strengthening of the regional financial sectors like banking and insurance. The anticipated economic growth over decades is now being replaced with actual economic growth.2
In this session, two members of GQG Partners' portfolio management team will be discussing how to think about the ways to participate in EM equities from passive investments to actively managed solutions and the importance of individual stock selection. They’ll also share their views on managing risks associated with EM equities, particularly given current geopolitical tensions and ideas on screening for EM equity growth opportunities.
1 Source: The Callan Periodic Table of Investment Returns. Callan Institute. 2 Source: International Monetary Fund.
Speakers:
Sudarshan Murthy
Senior Investment Analyst & Deputy Portfolio Manager of Emerging Markets Equity
Chulantha De Silva
Senior Investment Analyst
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