Global emerging markets roundtable GLOBAL EMERGING MARKETS
Global emerging markets (GEM) are the world’s growth engine. If the IMF is right, emerging economies will collectively grow by 3.8% this year and by 4.4% in 2023, beating the 3.3% and 2.4% expected by their developed market peers. Favourable demographics and an abundance of natural re- sources are driving such assumptions. But investors have tended to tread carefully in these markets, which are regarded as high risk, difficult to govern and home to some of the world’s largest polluters. Yet the IMF’s forecast for this year is almost 50% lower than the 6.8% achieved in 2021. Covid hit most of these markets hard and now they are having to deal with rising interest rates. An- other shock is raging inflation, which although is a boost for the commodities these countries export it is not so positive for household spending. Then there is China. Growth in the world’s second largest econ- omy is easing and two of its largest property developers have defaulted on their debts. Could all this be a sign of deeper prob- lems?
It appears many investors fear it
could be. They ditched billions of dollars in Chinese assets during March while its ties to Russia are not helping to build confidence. Yet there is more to emerging markets than China and Russia. Reforms have improved India’s investment case, while some point to value in parts of the Middle East and Africa. To discover how events have changed GEM’s investment case and how investors should navigate the evolving landscape, we have produced a 14-page special section. First, professional trustees, the head of public markets at a pension pool, an asset manager and consultants sat down to discuss how investors should approach these markets. This is followed by a feature examining if pension schemes were too hasty in dumping their emerging market exposures follow- ing the war in Ukraine and trouble in China. We hope you enjoy reading our coverage on what is an impor- tant asset class during a time of such uncertainty.
38 | portfolio institutional | May 2022 | issue 113
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