A commonly heard refrain amongst investment circles is that emerging markets, or EMs, are no longer what they used to be over the past two decades. Coming out of the Global Financial Crisis, EM equities were the best performing regional equity market, returning 79% in 2009 compared to a 27% return by the S&P 500. But it’s been pretty much downhill from there, with the EM lagging behind the Developed Markets (DM) with a 7% return vs. 13% by the DM (excluding the U.S.) in the current year. A similar narrative has been playing out in the energy markets, with EMs hardly visible in the global ESG and renewable energy boom despite being the most vulnerable to climate change.
But a cross-section of Wall Street is now saying not to give up on EMs just yet.
Investors and strategists at Goldman Sachs and JPMorgan Chase are saying there’s plenty of value to be found in EM commodity markets regardless of whether or not OPEC+ can resolve its latest deadlock.
In fact, some analysts have labeled it a “generational opportunity”.
“A generational opportunity exists today in many of the deepest-value emerging markets. Whether you export goods or whether you export commodities, you’re getting an external demand boom right now for pretty much whatever it is that you sell,” Whitney Baker, the former head of emerging-market research at Bridgewater Associates, has told Bloomberg.
A commonly heard refrain amongst investment circles is that emerging markets, or EMs, are no longer what they used to be over the past two decades. Coming out of the Global Financial Crisis, EM equities were the best performing regional equity market, returning 79% in 2009 compared to a 27% return by the S&P 500. But it’s been pretty much downhill from there, with the EM lagging behind the Developed Markets (DM) with a 7% return vs. 13% by the DM (excluding the U.S.) in the current year. A similar narrative has been playing out in the energy markets, with EMs hardly visible in the global ESG and renewable energy boom despite being the most vulnerable to climate change.
But a cross-section of Wall Street is now saying not to give up on EMs just yet.
Investors and strategists at Goldman Sachs and JPMorgan Chase are saying there’s plenty of value to be found in EM commodity markets regardless of whether or not OPEC+ can resolve its latest deadlock.
In fact, some analysts have labeled it a “generational opportunity”.
“A generational opportunity exists today in many of the deepest-value emerging markets. Whether you export goods or whether you export commodities, you’re getting an external demand boom right now for pretty much whatever it is that you sell,” Whitney Baker, the former head of emerging-market research at Bridgewater Associates, has told Bloomberg.
