Against an Uneven Backdrop, Individual Firms Have Shined
Broad confidence in emerging markets has taken some knocks, fueled by somewhat slower growth in China. At times like these, it’s important to look at the bigger picture. The “emerging markets” category includes a diverse set of countries, markets and companies. Certain nations (notably, Russia and Brazil) are confronted with significant near-term economic imbalances. Other economies such as India, Mexico and Indonesia are in better shape with positive structural reforms underway.
Chinese and Russian stocks have recorded substantial year-to-date total returns, while other markets have posted modest gains or losses. Likewise, by some measures, there’s meaningful variation among valuations. Against this uneven backdrop, it’s important for investors to maintain a focus on individual companies. Deep, company by company research helps identify those firms that should thrive over the long term.
There continues to be attractive opportunities in both challenged economies, such as Brazil, as well as fast-growing ones like India. Meanwhile, recent developments in Brazil, Russia and China have underscored the importance of staying on top of corporate governance with a research-driven active approach to investing.
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Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. This information is intended to highlight issues and not to be comprehensive or to provide advice.