Emerging Markets Have Had a Good Run. Things May Get Bumpier
- Trade spats, China slowdown, QT launch, U.S. yields pose risks
- Some investors are getting more selective in bonds, currencies
Cranes stand at a construction site in the Iskandar Malaysia zone of Johor Bahru, Johor, Malaysia.
Photographer: Nicky Loh/BloombergThis article is for subscribers only.
Emerging markets have weathered this year’s market volatility just fine so far. But some investors are using this as an opportunity to get a lot more selective, with challenges looming from trade tensions to the winding down of central-bank stimulus.
"Now we can rule out the ‘global synchronized growth’ theme, which dominated early this year," said Jinha Kim, head of global fixed income in Seoul with Mirae Asset Global Investments Co., one of South Korea’s biggest money managers. The firm has reduced its position in emerging-market currencies and bonds to neutral, and shifted to underweight for Turkey and Mexico specifically, Kim said.