PIN - Global X 2025 Emerging Markets Outlook

2025-01-24 11:52:00 ET

Summary

• U.S. interest rates, the strength of the U.S. dollar, and China typically combine to have an outsized impact on EM performance. Given recent trends across these three variables, the stars may once again be aligning for EM assets.
• We have high conviction on India and Argentina equities. Greece and Colombia could be attractive deep value plays, while Brazil and Chinese consumer names could appeal to contrarians.
• For those looking for income, we think EM dollar bonds stand out via yield, duration, and growth diversification opportunities.
• The Trump presidency creates uncertainty, but similar to 2016, the bark may be worse than the bite, and we think Trump administration policies could create tailwinds for Argentina, India, Greece, Eastern Europe, and Southeast Asia.

In each of the past 15 years through 2024, an Emerging or Frontier Market has led global market performance. ¹ However, the asset class, as defined by traditional metrics, has underperformed the U.S. Fortunately, investors now have more sophisticated options on how to play the parts of the market they view as most attractive, while avoiding those they deem risky. Between equity, bonds, active, passive, thematic, and regional investment strategies – there are various ways to access the potential outsized growth at discounted valuations often sought in Emerging Market ((EM)) assets. ...

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