Confirm you would like to unsubscribe from this list

Don't save

Remove strategy

Confirm you would like to remove this strategy from your list

Welcome to Thornburg

Please select your location and role to help personalize the site.
Please review our Terms & Conditions

For Institutional / Wholesale / Professional Clients

The content on this website is intended for institutional and professional investors in the United States only and is not suitable for individual investors or non-U.S. entities. Institutional and professional investors include pension funds, investment companies registered under the Investment Company Act of 1940, financial intermediaries, consultants, endowments and foundations, and investment advisors registered under the Investment Advisors Act of 1940.


Please read the information below. By accessing this web site of Thornburg Investment Management, Inc. ("Thornburg" or "we"), you acknowledge that you understand and accept the following terms and conditions of use.


Products or services mentioned on this site are subject to legal and regulatory requirements in applicable jurisdictions and may not be licensed or available in all jurisdictions and there may be restrictions or limitations to whom this information may be made available. Unless otherwise indicated, no regulator or government authority has reviewed the information or the merits of the products and services referenced herein. Past performance is not a reliable indicator of future performance. Investments carry risks, including possible loss of principal.

Reference to a fund or security anywhere on this website is not a recommendation to buy, sell or hold that or any other security. The information is not a complete analysis of every material fact concerning any market, industry, or investment, nor is it intended to predict the performance of any investment or market.

All opinions and estimates included on this website constitute judgements of Thornburg as at the date of this website and are subject to change without notice.

All information and contents of this website are furnished "as is." Data has been obtained from sources considered reliable, but Thornburg makes no representation as to the completeness or accuracy of such information and has no obligation to provide updates or changes. Thornburg disclaims, to the fullest extent of the law, any implied or express warranty of any kind, including without limitation the implied warranties of merchantability, fitness for a particular purpose and non-infringement.

If you live in a state that does not allow disclaimers of implied warranties, our disclaimer may not apply to you.

Although Thornburg intends the information contained in this website to be accurate and reliable, errors sometimes occur. Thornburg does not warrant that the information to be free of errors, that the functions contained in the site will be uninterrupted, that defects will be corrected or that the site and servers are free from viruses or other harmful components. You agree that you are responsible for the means you use to access this website and understand that your hardware, software, the Internet, your Internet service provider, and other third parties involved in connecting you to our website may not perform as intended or desired. We also disclaim responsibility for damages third parties may cause to you through the use of this website, whether intentional or unintentional. For example, you understand that hackers could breach our security procedures, and that we will not be responsible for any related damages.

Thornburg Investment Management, Inc. is regulated by the U.S. Securities and Exchange under U.S. laws which may differ materially from laws in other jurisdictions.

Online Privacy and Cookie Policy

Please review our Online Privacy and Cookie Policy, which is hereby incorporated by reference as part of these terms and conditions.

Third Party Content

Certain website's content has been obtained from sources that Thornburg believes to be reliable as of the date presented but Thornburg cannot guarantee the accuracy, timeliness, completeness, or suitability for use of such content. The content does not take into account individual investor's circumstances, objectives or needs. The content is not intended as an offer or solicitation with respect to the purchase or sale of any security or other financial instrument or any investment management services, nor does it constitute investment advice and should not be used as the basis for any investment decision.


No determination has been made regarding the suitability of any securities, financial instruments or strategies for any investor. The website's content is provided on the basis and subject to the explanations, caveats and warnings set out in this notice and elsewhere herein. The website's content does not purport to provide any legal, tax or accounting advice. Any discussion of risk management is intended to describe Thornburg's efforts to monitor and manage risk but does not imply low risk.

Limited License and Restrictions on Use

Except as otherwise stated in these terms of use or as expressly authorized by Thornburg in writing, you may not:

  • Modify, copy, distribute, transmit, post, display, perform, reproduce, publish, broadcast, license, create derivative works from, transfer, sell, or exploit any reports, data, information, content, software, RSS and podcast feeds, products, services, or other materials (collectively, "Materials") on, generated by or obtained from this website, whether through links or otherwise;
  • Redeliver any page, text, image or Materials on this website using "framing" or other technology;
  • Engage in any conduct that could damage, disable, or overburden (i) this website, (ii) any Materials or services provided through this website, or (iii) any systems, networks, servers, or accounts related to this website, including without limitation, using devices or software that provide repeated automated access to this website, other than those made generally available by Thornburg;
  • Probe, scan, or test the vulnerability of any Materials, services, systems, networks, servers, or accounts related to this website or attempt to gain unauthorized access to Materials, services, systems, networks, servers, or accounts connected or associated with this website through hacking, password or data mining, or any other means of circumventing any access-limiting, user authentication or security device of any Materials, services, systems, networks, servers, or accounts related to this website; or
  • Modify, copy, obscure, remove or display the Thornburg name, logo, trademarks, notices or images without Thornburg's express written permission. To obtain such permission, you may e-mail us at info@thornburg.com.

Severability, Governing Law

Failure by Thornburg to enforce any provision(s) of these terms and conditions shall not be construed as a waiver of any provision or right. This website is controlled and operated by Thornburg from its offices in Santa Fe, New Mexico. The laws of the State of New Mexico govern these terms and conditions. If you take legal action relating to these terms and conditions, you agree to file such action only in state or federal court in New Mexico and you consent and submit to the personal jurisdiction of those courts for the purposes of litigating any such action.


You acknowledge and agree that Thornburg may restrict, suspend or terminate these terms and conditions or your access to, and use, of the all or any part this website, including any links to third-party sites, at any time, with or without cause, including but not limited to any breach of these terms and conditions, in Thornburg's absolute discretion and without prior notice or liability.

Give Us a Call

Fund Operations

Thornburg Investment Management 2023 Outlook Emerging Markets Equity

Emerging Markets Should Be Well-Positioned for 2023

Josh Rubin
Portfolio Manager and Managing Director
22 Dec 2022
6 min read

Looking ahead, emerging market valuations are relatively attractive versus developed markets as EM central banks are better positioned in the struggle against inflation.

After a highly volatile year, we expect a relatively calmer 2023.  We expect many of the major headwinds that faced emerging markets in 2022 will likely moderate going forward, although we are mindful that other challenges may arise.  Over the past year, valuations across emerging markets (EM) have fallen significantly from their 2021 highs and look attractive relative to historical levels and when compared to developed markets.  Even as global growth slows, we believe EM equity valuations have room to improve in 2023, driven by lower inflation, a peaking U.S. dollar, greater clarity around key political events, and structural shifts within the region.

Evolving Supply Chains and Proactive Monetary Policies Should Dampen Price Pressures

We do not expect the same inflationary shocks that occurred in 2022 to repeat in 2023.  Stabilizing oil prices, improving global food supply, and recovery in supply chains should help lower inflation, as well as overall slower growth, weaker demand, and normalized labor markets.

Central Banks Are Not Behind the Curve on Inflation

Source: Bloomberg
Baskets are proxies for countries’ policy rates and inflation indexes.

Since EM central banks were ahead of the curve in pushing orthodox monetary policies throughout COVID, inflation is only modestly elevated versus historical trends, and real rates remain in positive territory across many major EM economies.  As a result, emerging markets seem poised to enter easing cycles earlier than developed markets because of their central banks’ monetary discipline.

Emerging Markets Valuations Varied in 2022, but are Generally More Favorable Heading into 2023

Valuations across EM diverged throughout 2022 with India trading at a noticeable premium to other markets like China, Brazil, Taiwan and Korea.  Taiwan and Korea faced headwinds this year due to the export-oriented nature of their economies.  Political uncertainty was a significant overhang in both China and Brazil, which has led to Brazil trading at its lowest valuation in over 10 years.  At current levels, the latter markets’ valuations are relatively attractive versus local interest rates, historical levels, and developed markets.  Looking ahead to 2023, we expect those markets to re-rate.  Taiwan and Korea should be beneficiaries of a recovery in the semiconductor and hardware technology sectors.  Brazil could be the first major EM outside of China to enter an easing cycle next year.  Meanwhile, China’s exit of its zero-COVID policies should be a huge boon to that country.

Emerging Markets P/E Ratios Varied in 2022, but Should Reset

Source: Bloomberg


Emerging Markets’ Currencies Resilience Should Support Economic Growth

Many EM currencies performed relatively well against a rapidly appreciating dollar this year compared to their developed markets counterparts. Several factors have contributed to their currency resilience. First, emerging market countries navigated COVID with much less stimulus than the developed world, which protected their sovereign balance sheets. Second, EM countries have become less reliant on trade with developed economies over the last decade, so their economies can continue to grow even as demand softens in Europe and the U.S.

These healthy fiscal and trade dynamics, combined with EMs’ proactive monetary policies, have mitigated the impact of the strengthening U.S. dollar, particularly compared to international developed markets. The Chinese and Indian currencies have weakened notably less than the euro, yen and other major developed market currencies, and the Brazilian real actually strengthened against the U.S. dollar in 2022.

More stable currencies also help buttress economic growth, which is another reason we have confidence of a recovery in EM economic growth before developed markets in 2023.

Emerging Markets Currencies Are Holding Up Relatively Well against the Dollar

Source: Bloomberg

EM Politics Remain a Priority for Investors, but a Little Less Muddied

Politics will continue to remain top of mind next year as we continue to closely watch events unfold, particularly in China, Brazil, Chile and Russia-Ukraine.

In China, President Xi Jinping was elected to an unprecedented third term in October 2022, thus strengthening his influence over the government.  Now that we have visibility into who will lead the country for the next five years, we await further clarity on Beijing’s economic and regulatory objectives, particularly around the country’s zero-COVID policy and property market.  China has announced a series of easing measures towards both issues throughout November and December 2022. Concerning the former, China is preparing its citizens to learn how to live alongside COVID – by applying more targeted virus containment, increasing the number of beds in COVID-designated hospitals, and speeding up its vaccine campaign.  In addition, Chinese regulators issued comprehensive guidance on easing financing for the property sector, which should help stabilize property sales and starts in the coming months.  We expect more widespread and concrete announcements will be made in March at the 10th National People’s Congress.

Meanwhile, voters in Latin America have shown their preferences for more centrist policies.  In September, Chileans voted to reject a left-leaning constitution, and we anticipate that next year will bring a more centrist draft and possibly another vote.  Brazil elected a left-leaning President in October who will have to govern with a center-right Congress.  Corporations and capital market investors will closely monitor Chile’s constitutional debate and Brazil’s centrist stance next year, amid hopes that more middle-of-the-road outcomes may establish concrete expectations for future investment opportunities.

While we do not have greater insight than others on the conflict between Russia and Ukraine, any resolution will be positive for investor sentiment.  Not only will energy prices and food supplies normalize, falling geopolitical tensions would drive risk aversion levels lower.

Emerging Markets Are Themselves a Source of Diversification

While we often talk about “emerging markets” as a singular asset class, EM is actually comprised of more than 20 diverse countries.  Even the composition of MSCI EM constantly shifts around, especially after two years of dislocation created by a global pandemic.  At the end of October 2022, China’s index representation in MSCI EM Index fell to just below 27%, the lowest since early 2017, while the combined weight of Korea, India and Taiwan reached a 20-year high.

This diversification means upside opportunities abound throughout the region.  Different countries will benefit from different trends, such as structurally higher commodity prices and multipolar world investing.  Meanwhile, it is important to be mindful of idiosyncratic drivers for specific markets, such as India’s social and economic infrastructure buildout, the Middle East’s reform agenda, and China’s shifting growth model under Common Prosperity.  Attractive opportunities within emerging markets can be identified through active investing, and we continue to expect strong businesses with high quality growth prospects to perform well in 2023.



COVID lockdowns continue to take a toll on growth and fuel investor uncertainty. China concluded the 20th Party Congress in October with President Xi Jinpeng elected to a third term. While short-term uncertainty remains elevated, the potential for a robust economic reopening in 2023 represents a unique catalyst.


Indian equities continue to be resilient amid global uncertainty, but equity valuations remain expensive relative to both EM peers and their longer-term historical average.

North Asia

Export-driven markets in North Asia, such as Taiwan and South Korea, face challenges as softening expectations for global growth pressure global trade.

Latin America

Inflation, domestic interest rates and political uncertainty appear to have peaked across much of the region, yet valuations still remain below historical averages.


Tailwinds from rising energy and commodities prices are abating but select opportunities across the region remain attractive.



Amid zero-COVID, we favor laggard reopening stories and compounders, who may benefit from a reopening in 2023. We remain cautious on Internet names and companies with elevated levels of regulatory/policy uncertainty.


Elevated valuation levels limit the number of attractive opportunities relative to other EM markets. We continue to target Indian companies that fit our characteristics of a strong business and trade at reasonable valuations.

North Asia

Underweight the region, especially companies more exposed to external growth and the broader semiconductor cycle.

Latin America

Improving economic dynamics, increased political clarity, and attractive valuations are providing opportunities to establish positions in a variety of strong businesses where prices have dislocated from fundamentals.


Underweight the region, but finding select opportunities as the economic landscape stabilizes.

Discover more about:

Stay Connected

Subscribe now to stay up-to-date with Thornburg’s news and insights.

More Insights

Racers at the finish line on a track
Global Equity

Forget the Magnificent 7 – Why You Should Invest in Europe’s Fantastic 5

Europe has its own crop of market-beating growth stocks that are overlooked compared to the Magnificent Seven in the US.
Choosing between an older advisor and a younger advisor.
Investor Advice

Should You Opt for an Older or Younger Financial Adviser?

Do you want the wisdom that comes with age or the innovation that comes with youth? Maybe you can have both with an advisory team.
Markets & Economy

Observations: The Value of Dividends and Munis to Stoke Income

Our Co-Heads of Investments make the case for dividend-paying stocks and the tax-free feature of Munis as tax hikes are possible, given our government debt levels.
Markets & Economy

Observations: Market Concentration and the Fed’s Policy Outlook

Our Co-Heads of Investments discuss whether the equity market rally is finally broadening and whether the Fed's forecast for three rate cuts makes sense.
Markets & Economy

Observations: Are Investors Too Complacent?

Our Co-Heads of Investments discuss whether the financial markets' substantial gains following last autumn's 'Fed pivot' left investors smug amid potential dangers.
Woman with her smart phone and plexus connection
Global Equity

Avoiding Concentration Risk in AI: Is It Time for a Reality Check?

Overexuberance for all things AI can create concentration risk. See how we’re curating diversified exposure designed to perform over the long term.

Our insights. Your inbox.

Sign up to receive timely market commentary and perspectives from our financial experts delivered to your inbox weekly.