Thinking strategically about Emerging Markets

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This year, like many others in the past decade, has not been a good one for emerging market assets. Across developing countries, the performance of bonds, stocks, and currencies has been poor in absolute levels and in general below that of their more developed counterparts. The headwinds they have faced this year include escalating trade tensions between the US and its major trading partners, rising US interest rates, and local and global political uncertainty as the anti-establishment, anti-globalization movements have colored electoral races worldwide. The underperformance has been particularly severe in Argentina and Turkey, where largely idiosyncratic vulnerabilities have been compounded by global shocks.