Emerging Markets: Navigating Q4 Volatility And Challenges

2025-01-24 15:18:00 ET

Summary

• EM equities faced a volatile Q4 2024 amid macroeconomic and geopolitical pressures, with China's rally fading and India and Brazil grappling with growth, fiscal and interest rate challenges.
• Consumption recovery remains the cornerstone of China’s long-term growth strategy, with government efforts increasingly focused on restoring consumer confidence to drive sustainable economic momentum.
• By diversifying the portfolio and selectively increasing exposure to high-quality names in resilient sectors such as infrastructure, consumption and renewables, we aim to balance short-term risks with India’s long-term growth trajectory, supported by ongoing reforms and structural shifts.
• Our on-the-ground visit to Brazil at the start of Q4 confirmed the longer-term structural growth potential at attractive valuations. However, given the near-term uncertainty and fiscal dominance debates, we have been reducing overall risk by trimming exposure and reallocating toward high-quality, resilient names with lower sensitivity to interest rate fluctuations.

EM equities faced a volatile Q4 2024 amid macroeconomic and geopolitical pressures, with China's rally fading and India and Brazil grappling with growth, fiscal and interest rate challenges.

Quarterly insights from Emerging Markets Equity Portfolio Manager Ola El-Shawarby, featuring her unique views on emerging markets. ...

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