Since the Great Financial Crisis, an allocation in Emerging Markets has been overlooked in global portfolio construction. Investors grew accustomed to relative underperformance to developed markets, due to frequent macro concerns and the perception of elevated volatility.
As global investors, over the last 12 months, we have positioned our multi asset class funds with an overweight position in Emerging Markets and Asian equities. One reason for this rationale is the risk/reward profile, given current valuations of those markets against their history and relative to developed markets like the USA. The other reason is, the companies that the funds are exposed to have evolved in recent years, increasing the exposure to the AI capex theme that we have been constructive on.
To read the full article, please click this link which will redirect you to FT Adviser.
If you are interested in exploring some of the broader themes discussed in this article, you can also read our Monthly Review: The Ceasefire Trade, Food Inflation and AI Concentration.
If you would like to learn more about our outlook for artificial intelligence and technology markets, you can read: The Capex Cycle's Moment of Truth.
