DIY Investor Magazine
/
2015 Issue
13
“Emerging market equities appear to have lost
some of their shine in recent years. A number
of concerns have weighed on the asset class,
from the impact of less easy US monetary policy
and a stronger dollar to slowing Chinese growth
and heightened geopolitical risk in a number of
markets.
However, I believe a lot of caution has already
been priced in. As a result of recent volatility,
most emerging market equities currently appear
to be significantly below their long-term average
valuation, and I think that their current level
represents a buying opportunity for us.
There are reasons beyond valuations to be
optimistic. Most emerging markets now exhibit a
combination of lower indebtedness, supportive
demographics and rising consumption, which are
likely to combine to provide a backdrop of strong
long-term demand.
For example, reforms in India, I believe, should
have long lasting positive impacts on the economy
and the investment climate in the country. One
exception may be China where the economic
development might be hindered by rapid growth
of debt in recent years and a less supportive
demographic profile
(an ageing population). While a slowdown in
Chinese economic growth brings with it risks, in
my view we are at the beginning of a shift away
from economic growth driven by fixed-asset
investment towards a more consumer-orientated
economy.
This rebalancing is, in my view, essential to the
long-term sustainability of the economy and
should present many compelling investment
opportunities along the way.
In emerging markets, there are many companies
that are evolving more rapidly than their
developed market counterparts but which are
less extensively researched. This combination
means that there is even more value which can
potentially be added through the kind of bottom
up, fundamentally-driven, analysis we conduct.
Moreover, by investing in emerging market
equities I believe we are able to get exposure to
many of tomorrow’s global industry leaders.
Over the last two decades, some South Korean
and Taiwanese electronics companies, for
example, have grown from relatively small low
value-added businesses into global leaders in
their respective fields.”
EMERGING MARKETS - ROSS TEVERSON, HEAD OF
STRATEGY, GLOBAL EMERGING MARKETS A LOT OF CAUTION
ALREADY IN THE PRICE
JUPITER AM FUND MANAGERS
GIVE THEIR OUTLOOK FOR 2015
