Article
Where do we find value in Emerging Market equities in 2025?
12 February 2025
Welcome to Applied Philosophy, a regular piece on global equity markets from András Vig and the Global Market Strategy Office. In the piece, they take an in-depth look at a topic of economic or market significance, before assessing how its evolution could inform or impact their model asset allocation.
Emerging Market equities kept pace with their global benchmark for most of the last 12 months except for the rally led by mostly the US after the US Presidential election. I expect economic growth to reaccelerate towards trend despite the higher levels of US policy uncertainty. This should be a hospitable environment for EM equities, in my view, especially if developed market central banks continue easing. In such a diverse asset class, I think it is worth digging deeper into which countries I would favour for the long term based on their valuations.
FAQs
Asset allocation is the process of dividing an investment portfolio among different asset classes, such as stocks, bonds and cash and so on. Bonds generally tend to be ‘safer’ investments than stocks and are, for example, seen as more defensive. Assets are allocated based on economic and monetary expectations.
Model portfolios are a diversified group of assets. They are designed to achieve an expected return with the corresponding risk. Model portfolios are usually extensively researched and, in most cases, have a combination of managed investments.
Spreading the risk and number of potential opportunities across various asset classes, such as equities, fixed income, and commodities. The aim of diversification is to reduce the overall risk of the portfolio.
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