FLBR - BlackRock favors emerging market assets

2023-07-19 12:22:50 ET

BlackRock said Wednesday that it favors assets tied to emerging markets rather than those related to more developed economies, basing its analysis in part on recent policies by central banks around the world.

“A brighter EM [emerging market] macro and policy picture may also be underappreciated, in our view. DM [developed market] central banks inching toward the end of rapid hikes is good for EMs – but a key difference is we think EM peers are closer to rate cuts as inflation falls,” BlackRock stated.

Of the emerging market sphere of investments, BlackRock noted two countries specifically: Brazil and Mexico.

“Within EM local currency bonds, we like Mexico for its quality tilt and Brazil for its exceptional carry from still-high bond yields.”

For investors looking to analyze the emerging market space further, see below a handful of popular EM-based exchange traded funds:

• Vanguard FTSE Emerging Markets ETF ( NYSEARCA: VWO )
• iShares Core MSCI Emerging Markets ETF ( NYSEARCA: IEMG )
• iShares MSCI Emerging Markets ETF ( EEM )
• Schwab Emerging Markets Equity ETF ( SCHE )
• SPDR Portfolio Emerging Markets ETF ( SPEM )

Year-to-date price action: VWO +5.9% , IEMG +7.9% , EEM +6.7% , SCHE +5.6% , and SPEM +5.7% .

Moreover, a handful of other funds that are worth mentioning are the Brazil and Mexico focused ETFs:

• iShares MSCI Brazil ETF ( NYSEARCA: EWZ )
• Franklin FTSE Brazil ETF ( FLBR )
• iShares MSCI Mexico ETF ( NYSEARCA: EWW )
• Franklin FTSE Mexico ETF ( FLMX )

Year-to-date price action: EWZ +23.3% , FLBR +19.6% , EWW +27.3% , and FLMX +26.6% .

More on Emerging Markets:

• EWZ ETF: Brazil's Valuation Is Downright Compelling
• Everything Coming Up Roses For EWW, Mexico Stocks Are A Buy
• What Does A Hawkish Fed Mean For Emerging Markets Bonds?

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