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.

Related News:

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.

Related Content

Fact Check: Fidelity Australian Equities Fund

As this is the last Money Management magazine of the year, it seemed apt to fact check one of 2018’s best performing funds, especially compared to l...Read more

Big four move into red

The big four banks have moved further into the red over the past week, with Westpac pulling financials down with its nine per cent drop. Dale Gillham,...Read more

Strong outlook for Challenger platforms

The outlook for Challenger platforms will remain strong as net fund flows favour the non-aligned platforms, according to Powerwrap’s chief executive...Read more



Add new comment