Secret to Enduring Stagflation Sends Traders to Emerging Markets

  • Pockets of faster growth, policy easing seen acting as hedge
  • Asian countries in best position to weather economic turmoil

A shopper buys produce at an outdoor market in the Tijuca neighborhood of Rio de Janeiro, Brazil.

Photographer: Maria Magdalena Arrellaga/Bloomberg
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For the first time in four decades, investors in the US and other rich economies are looking for a portfolio strategy that can win against elevated inflation and recession both at the same time.

No one knows what shape such a stagflation playbook will take, but one thing seems certain: it will include some emerging-market assets.