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Emerging markets: where do we go from here?

Friday, April 8, 2016

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It has been a difficult few years for emerging markets. Having been beset by challenges – from a rise in US interest rates to low commodity prices and slower economic growth – many investors are asking where we go from here. While the asset class faces headwinds, the long-term case is strong and intact: it remains a broad and diverse universe, currently at a potentially attractive entry point for long-term investors in both equities and bonds.

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Also available from Capital Group:

The search for secure income.

The uncertain outlook for the global economy has raised the prospect that core interest rates might stay lower for longer. Yields on investment-grade debt are subdued, or even negative, and could stay that way for some time. One possible investment alternative is to explore the opportunities offered by dividend-growing stocks; their ability to offer secure income combined with lower volatility is attractive over the long term.

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Company Profile
Founded in the US in 1931, Capital Group is one of the world's largest independent investment managers, with around $1.4 trillion* under management. Investment management is our only business. Throughout our 85-year history, our aim has always been to deliver superior, consistent results for long-term investors. The stability of our privately owned organisation and our singular investment focus have enabled us to maintain a long-term perspective over the decades. We believe this helps to align our goals with the interests of our clients. The majority of our portfolio managers and analysts have witnessed several market cycles and have been with Capital for many years. Our active investment process is designed to enable individual investment professionals to act on their highest convictions, thus limiting the risk associated with isolated decision-making. Fundamental proprietary research provided by our global network of experienced investment analysts forms the backbone of our approach. We build our investment strategies with durability in mind, backed by our experience in varying market conditions. To this end, we believe that our strategies are well suited to deal with today's challenges of looking for sources of income in a lower-yielding environment and accessing growth with a less volatile profile of returns.
* As at December 2015