- Emerging market stocks might be riskier, but even with higher equity risk premia, IEMG appears undervalued.
- The fund does however depend on Chinese authorities not presenting new challenges to Chinese equities, most importantly for ADR/VIE structures.
- IEMG has Chinese equity exposures, including ADRs, but provided no (further?) break-down in U.S.-China relations, IEMG will benefit from calm.
- As risk sentiment remains constructive, I see over 20% further upside of IEMG as we look to 2022, by which point we would need to reexamine the position.
For further details see:
IEMG: Emerging Market Equities Appear Undervalued