The next phase of the emerging markets story is here

ON EMs

M&G's Matthew Vaight says the next phase of the emerging markets story will focus on company fundamentals becoming more shareholder-orientated

Investors’ enthusiasm for emerging markets has distinctly cooled this year. A deteriorating macroeconomic environment has dampened sentiment, while in June, the prospect of stimulus measures being unwound in the US sparked panic-selling. In the first half of 2013, emerging market equities underperformed their counterparts in developed markets by the biggest margin since the Asian crisis in 1998. In an environment of slowing growth, corporate performance becomes even more important. We have long argued there is little correlation between headline GDP growth and stock market returns. ...