Emerging market equities offer appealing valuations and show an improving earnings profile. In this context, China and India are preferred to advanced economies’ equities. The ‘New China’ theme includes companies more exposed to domestic consumption and service sectors (healthcare, technology and telecommunications) and it could benefit from the rise of the middle class and the transition towards a more balanced economy.
In a world of ultra-low bond yields and weak earnings growth in developed markets, emerging markets could be a source of return for investors in the coming months. An active approach, focused on quality and selection, will be crucial to navigate the current complex phase and spot opportunities in the varied emerging market world.
Matteo Germano is global head of multi-asset at Pioneer Investments
