Emerging markets “show resilience”

Emerging markets are increasingly demonstrating their economic independence from developed markets, with economies across the sphere growing significantly while Europe and North America stagnate or decline, said Ashmore’s Jan Dehn, head of research. Dehn notes the economy of the Philippines has flourished this year, growing 7% in the second quarter year-on-year, well ahead of analysts’ expectations. He expects this strong performance to continue as the government implements much needed infrastructure-spending programmes. Elsewhere, emerging markets are showcasing their resilience despite political upheaval. Despite a recent coup attempt in Turkey, the country’s sovereign external debt rating remains unchanged at BBB-, investment grade. Moving forward, emerging market financial vehicles will also become available to Western investors with JP Morgan announcing it would launch a range of Sharia-compliant sukuk bonds. While some have expressed concerns that a further rise in Federal Reserve rates will harm emerging markets, Dehn does not think the asset class is seriously threatened by the prospect. “Earlier this year, markets had priced in three Fed hikes and emerging market FX [foreign exchange] was still up versus the dollar, while emerging market bonds strongly outperformed developed market bonds. We think emerging markets will perform strongly after a hike,” he said. There are signs elsewhere that emerging markets are returning to investors’ favour, with flows to the region’s bond exchange-traded funds in June and July reaching $5.7 billion (€5.1 billion). Antoine Lesné, a head of strategy and research at SPDR ETF, said this “may have signalled that the time is right to go back to the emerging world”. ©2016 funds europe  

Sponsored Profiles

SPONSORED FEATURE: Alternative thinking

Mar 16, 2017

Portfolio Manager Davide Cataldo discusses the results of the Pioneer Investments’ survey on liquid alternatives and how investors can be encouraged to increase their allocation.

SPONSORED FEATURE: Interest rate risk hedging: Swapping to other options

Mar 16, 2017

Heightened margin requirements for cleared and uncleared OTC derivatives pose a challenge for legitimate hedging activities and are driving financial institutions to explore alternative hedging...

SPONSORED FEATURE: Why blockchain could be the fund industry’s next Ford Model T

Mar 16, 2017

Blockchain aims to radically change the way investors can access funds, says Olivier Portenseigne, Managing Director and Chief Commercial Officer of Fundsquare.

SPONSORED FEATURE: Open architecture: In need of protection

Mar 16, 2017

Greater efficiency must be embraced to ensure regulatory changes do not destroy choice for fund buyers, says Bernard Tancré of Clearstream.

Executive Interviews

CEO INTERVIEW: Munro gains three-year track record

Mar 16, 2017

Aviva Investors’ annual results this month were the third set since Euan Munro took over as CEO. Nick Fitzpatrick speaks to him about the ‘Aims’ fund at the heart of the firm’s outcome strategy.

DISTRIBUTION INTERVIEW: Tales of the unexpected

Mar 16, 2017

Laurence Terryn, a fund selector at Candriam, tells David Stevenson how the twists and turns of the past year’s macro environment flavoured her approach to fund selection.



Mar 07, 2017

Funds Europe speaks to leading Luxembourg industry figures about the growing regulatory demands on asset servicers and how to remain profitable in spite of major investments in technology.

SEC LENDING ROUNDTABLE: Both a borrower and a lender be

Jan 11, 2017

Industry heavyweights, including agent lenders, discuss issues affecting the securities lending sector such as regulation and the types of collateral being used.