The case for emerging market equities

Emerging markets (EM) have caught the eye of investors, particularly in relation to the US dollar. Historically, a 1% decrease in the currency equates to approximately a 4% rise in EM equities. US President Trump’s desire for a weaker dollar for trade balance reasons, along with interest rates cuts, policy uncertainty, and recession risk, have weakened demand for the currency and strengthened the appeal of EM equities. The appeal of EMs is not just tied to a weaker US dollar. Emerging markets are bigger, broader and more innovative than many investors realise. They include commodity exporters,...