In this quarter’s edition:
Our team’s views on how the improvement in emerging market current accounts is helping support the asset class. We investigate the importance of current accounts, what drives a current account improvement, and how the recent movements across emerging markets could provide an attractive entry point for prospective investors.
Topic of the quarter: Improving current accounts and their importance for emerging market investors
The familiar parallels drawn between the current economic situation of emerging markets and the ‘taper tantrum’ of 2013 are not entirely justified. In 2013, several years of strong capital flows, deteriorating current accounts and solid performance preceded the swift reversal in EM asset prices. We are now in a situation where EM current accounts are much more balanced, which is helping drive our current top-down positioning. We also explore the threat of populist politics and address the challenges some countries in our investment universe could face under this new populist era.Download full article Return to Investment views