Templeton's Hardenberg: Why we expect EM volatility in the coming months

The emerging markets asset class remains at the forefront of the world's most vibrant and fastest-growing economies, with overall gross domestic product growth rates comfortably in excess of the developed world this year, despite much-publicised slowdowns in certain countries, writes Franklin Templeton's Carlos Hardenberg.

In addition, emerging markets have solid foreign reserves and generally lower debt-to-GDP ratios than those of developed markets. Emerging market equities represent over 30% of the world market capitalisation, yet investors generally have a much lower weighting in this asset class in their portfolios. We believe the challenges faced by some countries, sectors and companies - such as energy firms and Chinese banks - have obscured interesting opportunities within the emerging market arena.  Has de-rating of emerging equities reached a turning point? In particular, developing marke...