Capital Ideas

Investment insights from Capital Group

Emerging Markets
What’s next for the emerging markets rally?

Emerging markets have rallied 82% since early 2016, but individual country returns have differed widely. Asian markets have led the charge — carried by large technology companies such as Taiwan Semiconductor Manufacturing, Samsung Electronics and Alibaba. And while these tech companies remain leaders in their respective industries, there may also be value in more overlooked areas. For example, Brazil and Russia are two countries that were hurt by geopolitical issues and falling commodity prices, but have seen an uptick in economic growth in recent quarters. Their respective MSCI indexes still remain well below highs from a decade ago, and could have more room to rebound if headwinds continue to dissipate. As global conditions change, investors may want to consider flexible investment solutions with the ability to invest in different markets.

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