Emerging markets: time to stay invested or pull back?
Several market events contributed to the recent turmoil in global financial markets, notably China’s recent monetary adjustments and freefalling market values, causing investors to worry that a crisis is looming in emerging markets.
QMA, a $117 billion asset management business of Prudential Financial, argues in its newest "QMA Insights" that necessary structural reforms in the region have caused only short-term pain and emerging markets will continue to grow at rates beyond those of developed nations. That presents multiple investment opportunities for quant investors, says Rodolfo Martell, portfolio manager and strategist for QMA’s Non-U.S. Core Equity Investment Team.
"We don’t think it’s time to give up on emerging markets," says Martell. "Yes, they have changed, they have evolved and they have slowed down, but they remain the engine of growth for the world."
Martell recommends investors take a bottom-up approach in order to capture the full opportunity the region offers.
"To be able to capture this long-term potential," Martell notes, "investors should look through the noise created by negative retail flows as well as sensational reports in the news that see contagion and crises around every corner."
Interested in learning more about a quant approach to investing in emerging markets? Read Rodolfo’s latest insights here. Want to speak with Rodolfo? Contact John Chartier.