Investment success in emerging markets requires preparation and a willingness to accept risk. Julia Sze, impact investor and member of Thornburg’s Board of Directors, moderates a conversation with portfolio managers Charlie Wilson and Josh Rubin as they tackle the themes and processes they use to improve the odds for outperformance in emerging markets.
Portfolio Manager Josh Rubin tells the Wall Street Journal that investors have pivoted away from tech stocks that flourished during the pandemic and are now better off buying shares of “boring companies” that are well positioned for growth as the U.S. emerges from the pandemic.
From strongly rebounding economic growth to low global rates and manageable inflation dynamics, emerging market stocks are well positioned. But volatility mitigation remains a must.
The index comprises 26 countries with their own politics, monetary and fiscal policies and GDP growth drivers. But there are also strong, resilient companies in most of them and plenty of potential upside for returns.
Correlations in "growth" and "value" equity factors may undercut the diversification benefits of benchmark-relative exposures to sectors and geographies. Consistent portfolio balance by "styles," though, can lower beta and lift alpha.