Mid-Year Emerging Markets Update | Mark Mobius

Mid-Year Emerging Markets Update | Mark Mobius:



"As I’ve often said, investing in emerging markets requires patience, long-term perspective, and selective stock-picking. I think many investors focus too much on the short-term. As long-term investors, we view short-term bouts of volatility as an opportune time to find potential bargains for our portfolios, and we certainly experienced that in the first half of the year. Sentiment in emerging markets seemed to be at a particularly low point at the very start of the year, coming off a weak 2013. As the US Federal Reserve (Fed) started tapering its quantitative easing program, fears seem to have surfaced that  liquidity would dry up, and concerns about potentially slower growth in China this year gave some investors pause. Headlines of conflict and violence in countries including Ukraine, Turkey, Thailand and Nigeria also affected overall investor sentiment in the first half of the year, along with doubts about the readiness of Russia to host the Winter Olympics and Brazil to host the FIFA World Cup. On the brighter side, India’s market saw a post-election resurgence of hope, China’s economy did not experience a hard landing and the upgrade of Qatar and United Arab Emirates to emerging markets status from frontier appeared to fuel investor interest. We believe emerging markets overall are now in what could be classified as a “recovery phase” after 2013’s underperformance, barring no further unexpected shocks.



We believe it’s important to look at the big picture as an investor in emerging markets. During the last 10 years, there have been only three years when emerging markets underperformed developed markets, 2013 being one of them.1 In the first half of 2014, emerging markets have generally outperformed developed markets,2 and I would say that we’re in a sweet spot in terms of emerging markets’ recovery. And, we think a number of frontier markets, the even lesser-developed subset of emerging markets, look particularly attractive right now."



'via Blog this'