After false starts in the last few years, we believe emerging markets are set to deliver strong performance in the year to come thanks to accelerating and broad-based drivers.
Will emerging markets stocks rebound in 2019? Attractive valuations, strong forecast earnings growth, structural reforms, and an abating dollar headwind suggest they will.
Many forces undercut and bolster the greenback. Rather than accepting unknown risk around its near- or long-term direction, dollar-based equity investors may be better served using currency hedges so they can focus more on the individual merits of overseas securities.
Yet the earnings potential of developed and emerging markets stocks is real, since they are at earlier points in their respective business cycles.