Wait for Fed Rate Rise to Buy Emerging Markets, says Standard Life

Alistair Way, head of emerging market equities for Standard Life said that the outlook for emerging markets is uncertain, and it was too early to be “unambiguously positive”

Emma Wall 26 May, 2016 | 11:48AM
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It has been a torrid time for emerging markets. After 10 years of incredible growth, the past five years have tested even the most patient investor. The China slowdown, commodities cool-off, slowing trade growth, fall in productivity and increasing levels of debt in the region have all acted as headwinds for investment returns.

It is not all doom and gloom however. Alex Wolf, emerging markets economist for Standard Life Investments said that these risks had not gone away, but that countries that implement productivity enhancing reforms can break out from the pack.

“Emerging market economic growth is lower than it has been in recent years. But this is just a return to norm. Before the commodity boom emerging markets growth ran at only a few percent more than developed economies,” he explained.

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Emma Wall  is former Senior International Editor for Morningstar