INSUBCONTINENT EXCLUSIVE:
NEW YORK: After emerging market stocks led global equity markets lower in a brutal 2018, some US-based fund managers are betting that asset
class may have largest rebound in new year.
It may not look likely at moment, given that an economic downturn in China prompted iPhone-maker
Apple Inc (AAPL.O) to lower its quarterly revenue forecast on Wednesday for first time in a decade
selloffs around world following day.
Yet fund managers from Westwood Holdings Group, GMO, T
Rowe Price and Causeway Capital Management are among those who are betting that emerging market stocks will post outsized gains in 2019
They cite a combination of compelling valuations and a likely decline in value of dollar that will help accelerate economic growth.
As China
said Sebastien Page, head of asset allocation at T
He expects emerging markets will outperform in year ahead as Federal Reserve curtails its pace of interest rate hikes and dollar
been in a bear market since September, placing them already four months into deep declines that rocked US equities market in December
The average bear market in emerging markets has lasted 220 days and posted a decline of 32.4 per cent, or about 7 percentage points more
than roughly 25 per cent drop in MSCI Emerging Market Index since it hit near-record highs last January, according to data from Ned Davis
Research.
While emerging markets started year with another roughly 1.7 per cent loss over first two trading sessions, fund managers say they
are increasing their bets on stocks in countries that are among most beaten-down, expecting they will have largest rebound if and when a
Markets fund.
She has been increasing her stakes in South Africa, Thailand and Peru, she said, with largest positions in companies such as
Shares of Credicorp are up 8.8 per cent over last 12 months, while shares of Sanlam are down 3.9 per cent over same time.
Perez-Coutts has
been underweight China since start of last year, though she is starting to wade back in by buying shares in gaming and e-commerce companies
opportunity with a forward price-to-earnings ratio of approximately 10 even after recent declines in US market have pushed forward
price-to-earnings ratio of SP 500 to slightly below 15 for first time in about 5 years.
As a result, Gubler has been increasing his
positions in small-cap companies in India, as well as energy companies that have sold off as price of oil has tanked
