Emerging Markets Lead Performance in 2018

Emerging markets were among the most resilient in the first three months of the year, thanks to cheaper valuations and an increased focused on domestic growth

Scott Dixon 12 April, 2018 | 1:38PM

US President Donald Trump has disrupted stock markets in 2018 with announcements of a trade war on China

The start of 2018 has proved to be a behavioural minefield for investors. Like most of 2017, investors are grappling with a backdrop of trade tensions, political instability, rising interest rates, and a mature business cycle. Yet, perhaps of more importance, investors are now also questioning their own unbounded optimism and recognising that markets won’t always go up.

What is interesting is that the market setback in the first quarter came at a time when the fundamentals remained intact. Corporate earnings continue to rise in the majority of instances and default rates remain low. Hence, the unwinding of performance appears more complex than an unassuming turn in the business cycle.

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About Author

Scott Dixon  is an Investment Writer for Morningstar Investment Management Europe

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