24 mar 2020
24 March 2020Given recent market turmoil, Mike Hugman asks: has the current crisis created a unique entry point for long-term investors?
The mechanics of capital markets have changed since the global financial crisis meaning that the current ‘triple’ crises* do not pose a systemic risk to the banking sector. Yet unprecedented turmoil has swept through markets. And investors have seen a major re-pricing of emerging market assets. In some cases, this has been on a par with the global financial crisis.
Before the recent turmoil, many emerging market assets were already on undemanding valuations, and structural investors’ positioning was relatively light in emerging market local debt and equities. Furthermore, structural fundamentals of emerging market economies are typically strong.
In a new paper, Mike Hugman explains that as short-term fundamentals and market liquidity begin to stabilise, we believe it is vital for long-term investors to assess the return potential in emerging markets as a whole and the bottom-up opportunities that this historic market dislocation has created.
Read the paper