Many global portfolios remain 7\u20138% underweight, so there is room for significant inflows if the momentum continues. Even a partial rebalancing could lead to significant performance gains.<\/p>\n\n\n\n
Despite the dominant headlines, the actual impact on EM economies is often overestimated due to fears surrounding tariffs and geopolitics. Vietnam and the Philippines, for example, are considered trade-dependent, but their growth is largely driven by domestic consumption. Chinese exporters have adapted quickly by rerouting their supply chains and maintaining their export volumes. Conclusion: Short-term volatility may increase, but the long-term trend remains intact.<\/p>\n\n\n\n
Currency markets offer additional tailwinds. Historically, emerging market assets have outperformed during periods of US dollar weakness. With economists forecasting a multi-year soft dollar cycle, emerging markets could be entering a new phase of strength. Developed markets such as Europe and Japan have already responded; emerging markets are not until catching up.<\/p>\n\n\n\n
Valuations add to the appeal. Emerging market equities posted earnings growth of over 20% last year, yet trade at significantly lower price-to-earnings ratios than the S&P 500. For investors wary of excessive valuations in developed markets, emerging markets offer higher growth at lower prices.<\/p>\n\n\n\n
The real challenge is not whether to invest in emerging markets, but how. Most EM funds focus on a handful of mega-cap companies such as Tencent, TSMC, Samsung and Alibaba. These are solid companies, but they are widely held and offer limited alpha. Our strategy takes a contrarian approach. It targets the “forgotten middle” \u2013 average companies that are overlooked by mainstream investors but have clear catalysts for change.<\/p>\n\n\n\n
This strategy is supported by one of the industry’s largest EM research platforms, with analysts in Asia, Latin America and emerging Europe. Thanks to in-depth local knowledge and a willingness to deviate from the consensus, the team can uncover inefficiencies that others miss.<\/p>\n\n\n\n
The case for emerging markets today rests on four pillars: persistent underweighting, attractive valuations, diversification benefits and frequent catalysts for change. Emerging markets are developing faster than developed markets politically, economically and entrepreneurially, offering more opportunities for active investors.<\/p>\n\n\n\n
Emerging markets have not failed. They are undervalued, understaffed and underestimated. For investors willing to look beyond the obvious, emerging markets offer a compelling opportunity to rediscover growth, value and resilience.<\/p>\n","protected":false},"excerpt":{"rendered":"
Emerging markets are currently experiencing a quiet comeback. They were once the driving force behind global growth during China’s supercycle, but allocations to emerging markets have shrunk dramatically over the past decade.<\/p>\n","protected":false},"author":5,"featured_media":1435181,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ngg_post_thumbnail":0,"footnotes":""},"categories":[220],"tags":[],"class_list":["post-1441895","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-opinion-leaders-en"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.payoff.ch\/en\/wp-json\/wp\/v2\/posts\/1441895","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.payoff.ch\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.payoff.ch\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.payoff.ch\/en\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/www.payoff.ch\/en\/wp-json\/wp\/v2\/comments?post=1441895"}],"version-history":[{"count":1,"href":"https:\/\/www.payoff.ch\/en\/wp-json\/wp\/v2\/posts\/1441895\/revisions"}],"predecessor-version":[{"id":1441896,"href":"https:\/\/www.payoff.ch\/en\/wp-json\/wp\/v2\/posts\/1441895\/revisions\/1441896"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.payoff.ch\/en\/wp-json\/wp\/v2\/media\/1435181"}],"wp:attachment":[{"href":"https:\/\/www.payoff.ch\/en\/wp-json\/wp\/v2\/media?parent=1441895"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.payoff.ch\/en\/wp-json\/wp\/v2\/categories?post=1441895"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.payoff.ch\/en\/wp-json\/wp\/v2\/tags?post=1441895"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}