Industry Voice: Global Emerging Markets - Opportunities still exist, despite recent strength

clock • 3 min read

At T.Rowe Price, we believe global emerging markets (EMs) continue to offer attractive investment opportunities even after a strong 2017. Many of these markets are enjoying ongoing progress of meaningful economic and political reforms, as well as improved current account balances and lower inflation.

key points

  • Emerging markets (EM) equities still appear cheaper than developed markets and versus their own historical levels, although they are more expensive than a year ago.
  • Although yields on EM bonds have fallen (and prices have risen), the asset class offers broadly healthy relative fundamentals and attractive yields.
  • Risks include a sharp China slowdown, a Korean conflict, the withdrawal of quantitative easing, or a commodity price collapse.
  • Active management lets equity investors focus on attractive pockets of EM growth and allows bond investors to own assets outside their benchmark.

Emerging market growth looks set to continue

Broadly speaking, economic growth in EMs outpaced developed markets' growth in 2017. This stronger growth should continue in 2018 as countries like Brazil, Russia and India improve. Growth should support further gains in corporate earnings, which recovered strongly in 2017. Furthermore, we continue to see many companies undertake steps to control costs and improve profits. Read our 2018 Global Market Outlook

 

 

 

Important Information

This material is being furnished for general informational purposes only. The material does not constitute or undertake to give advice of any nature, including fiduciary investment advice, and prospective investors are recommended to seek independent legal, financial and tax advice before making any investment decision. T. Rowe Price group of companies including T. Rowe Price Associates, Inc. and/or its affiliates receive revenue from T. Rowe Price investment products and services. Past performance is not a reliable indicator of future performance. The value of an investment and any income from it can go down as well as up. Investors may get back less than the amount invested.

The material does not constitute a distribution, an offer, an invitation, a personal or general recommendation or solicitation to sell or buy any securities in any jurisdiction or to conduct any particular investment activity. The material has not been reviewed by any regulatory authority in any jurisdiction.

Information and opinions presented have been obtained or derived from sources believed to be reliable and current; however, we cannot guarantee the sources' accuracy or completeness. There is no guarantee that any forecasts made will come to pass. The views contained herein are as of the date written and are subject to change without notice; these views may differ from those of other T. Rowe Price group companies and/or associates. Under no circumstances should the material, in whole or in part, be copied or redistributed without consent from T. Rowe Price.

The material is not intended for use by persons in jurisdictions which prohibit or restrict the distribution of the material and in certain countries the material is provided upon specific request. It is not intended for distribution to retail investors in any jurisdiction.

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