Bringing you live news and features since 2006 

Emerging markets have had their day in the sun, says Kames CIO  

RELATED TOPICS​

Investors should avoid emerging market equities this year as weaker commodity prices and a strong dollar continue to impact the asset class, according to Kames Capital’s chief investment officer (CIO) Stephen Jones.

Far from looking like one of the more undervalued areas within the equities space following a lacklustre 2014, Jones says the asset class continued to face severe challenges this year.
 
“For us 2015 is very much a developed market play in terms of equities,” he says. “Emerging markets have had their day in the sun, and now they are being battered by a strong US dollar and weak commodity prices.”
 
Emerging markets lost ground last year after a sharp sell-off in the summer caused by expectations the US Fed was preparing to hike rates.
 
There were some bright spots among the emerging markets last year, including India where the Sensex climbed nearly 30%. But Jones said with a few exceptions, emerging markets were the least attractive option for investors in any scenario that sees US interest rate rises delivered.
 
“Last year India re-emerged as the place to be because, unlike most emerging markets, it is a huge energy importer, and enjoyed some positive political change,” he says.
 
“So investors can point to India as a brighter spot, but certainly the majority of countries across Latin America, China and Asia look challenged.”
 
Rather than focus on emerging markets, Jones expects 2015 to be dominated by Europe in particular, where returns have already met full year forecasts.
 
“Certainly with central bank stimulus being applied aggressively, Europe and Japan, and to a lesser extent the UK, can all make progress, as investors look beyond fixed income for an attractive real return.
 
“In particular, we favour European equities now that European Central Bank president Mario Draghi has “shown the market the money,” and there is a shift in allocations taking place as investors who have been underweight European equities increase their positions.”
 

Latest News

Figment Europe, a provider of institutional staking infrastructure, writes that it is solidifying its presence in the heart of Europe’s..
Saving and investing app, Moneybox, has doubled the number of ETFs available on the platform, in the light of ‘growing..
Global X ETFs has announced the appointment of Ryan O'Connor as its Chief Executive Officer effective as of April 8, 2024. ..
Value-driven structured credit investing firm, Angel Oak Capital Advisors, LLC, has announced the completed conversions of two of its mutual..

Related Articles

Ryan McCormack, Invesco
This year sees the 25th anniversary of Invesco’s QQQ, the USD240 billion ETF – the fifth largest ETF in the...
ETFs
The European ETF market achieved a record 28 per cent growth – reaching over USD1.8 trillion assets under management (AUM)...
Sal Esposito, Zacks Investment Management
Zacks Investment Management started doing investment research in 1978 and in 1992 started its investment management arm, initially with SMAs...
Jeremy Senderowicz, Vedder Price
Jeremy Senderowicz, a member of the Investment Services Group at law firm Vedder Price, has witnessed a steady upswing in...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by