EMs still worthwhile: Lazard
Despite the largest quarterly decline on record for emerging markets debt and weakness in emerging markets equities and currencies, Lazard Asset Management has signalled to investors that they still present an appealing investment option in the medium term.
Currency, interest rate, and policy turbulence saw weakening in the last quarter, but Lazard believed that these drivers of macro decline would be short-lived.
“Despite the possibility of further consolidation in the near term, we believe emerging markets equity and debt valuations currently provide an attractive entry point and a good cushion against any further volatility, with emerging markets fundamentals intact in the medium term,” an outlook paper from Lazard said.
The asset manager said that equity fundamentals in the sector had shown stable-to-higher earnings growth estimates for 2018 and 2019, and new areas of return had formed as well as newer industries.
It also believed that the valuation opportunity across emerging markets debt had “improved significantly”.
The key question for investors then, Lazard said, was whether the sell-off across emerging markets assets was in line with the deterioration in fundamentals. Rather, it suggested that some areas were oversold, even at lower valuation targets.
AUTHOR
Hannah Wootton
Recommended for you
Clime Investment Management has faced shareholder backlash around “unsatisfactory” financial results and is enacting cost reductions to return the business to profitability by Q1 2025.
Amid a growing appetite for alternatives, investment executives have shared questions advisers should consider when selecting a private markets product compared to their listed counterparts.
Chief executive Maria Lykouras is set to exit JBWere as the bank confirms it is “evolving” its operations for high-net-worth clients.
Bennelong Funds Management chief executive John Burke has told Money Management that the firm is seeking to invest in boutiques in two specific asset classes as it identifies gaps in its product range.
