Investing in emerging markets: a political play

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  • 15 mins 57 secs

Dean Newman and Stuart Edwards discuss their outlook for equities and debt and where the risks and opportunities lie.

A rising US dollar and US treasury yields, coupled with an unpredictable political landscape could leave some emerging markets exposed. How are our equity and bond teams navigating this environment?

  • Russian sanctions have certainly unnerved the market but we believe this has been factored into valuations and positive fundamentals remain
  • Latin America is experiencing a wave of political uncertainty and our equity and bond teams believe Mexico has the strongest story
  • South Africa’s political backdrop is providing a transformative moment for the country. Long-term challenges remain but in a broad market we see opportunity to selectively increase exposure

Investment risks

The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested. When investing in emerging and developing markets there is potential for a decrease in market liquidity, which may mean that it is not easy to buy or sell securities. There may also be difficulties in dealing and settlement, and custody problems could arise.

Important information

Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. Invesco Perpetual is a business name of Invesco Fund Managers Limited, Perpetual Park, Perpetual Park Drive, Henley-on-Thames, Oxfordshire, RG9 1HH, UK. Authorised and regulated by the Financial Conduct Authority.

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