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Trump Trade Row Flips Risk, Turning Emerging Markets Into Havens

  • Volatility subsides in developing world versus developed
  • EM valuations still seem compelling as deficits narrow
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Will There Be a Trade War?

That old saw behind why people invest in emerging markets -- more risk brings more reward -- might need to be reworked.

As stocks in the developed world gyrate wildly on trade-war rhetoric, relative volatility has subsided in the emerging world, according to a ratio between the two indexes that track the measure. It’s stayed below its five-year average since the start of this year, a reversal from the last quarter of 2017.