Investor confidence in emerging markets is at its highest level in more than a year, according to an assessment by deVere Group.
“There’s been a considerable jump in interest from our clients regarding investment opportunities in emerging markets over the last two months,” Nigel Green, the founder and chief executive of deVere Group, says in a prepared statement. “Our independent financial advisers in every global region in which we operate report that a growing number of clients are now actively expressing a keen focus on emerging markets.”
deVere international investment strategist, Tom Elliott, offers three main reasons for this shift:
- One, “as developed markets approach old highs, or surpass them, the valuation discount of emerging stock markets has become more compelling;”
- Two, “tapering of [qualitative easing] has not resulted in higher U.S. Treasury yields and more expensive borrowing costs for emerging market countries;”
- And three, “political uncertainty has eased a little. Russia has not invaded Ukraine; India has voted overwhelmingly for a new prime minister, Mr. Modi, who is unambiguously dedicated to the cause of economic reform; whilst China has shown itself willing to step in to prevent the collapse of large savings trust companies, and a wave of bad debt coming from Chinese property-related companies and banks has not, so far, materialized.”
The bottom line for deVere, which also notes that it has more than 80,000 clients worldwide and $10 billion under advisement, is this: “Emerging markets have taken a hit in recent times, with some significant losses even as recently as earlier this year, but investor confidence is clearly back.”
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