Michel Pireu Columnist

At Research Affiliates and PIMCO, we see two overarching reasons for long-term investors to consider continuing to hold a strategic allocation to EM equities: fundamentals and valuations.

The biggest risk when investing in an EM equity market is a funding crisis, when a company or government borrows in US dollars and investors lose trust in its ability to cover interest payments. The risk of a broad-based funding crisis in EM — especially the kind that affects the largest EM equity markets — is low. The largest constituents of the EM equity universe have the best fundamentals. China, South Korea, Taiwan, India and Russia make up nearly 70% of the MSCI EM Index.

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as exclusive Financial Times articles, ProfileData financial data, and digital access to the Sunday Times and Sunday Times Daily.

Already subscribed? Simply sign in below.



Questions or problems? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now