Over the years, wealth managers have been able to predict only one thing about emerging markets: constant change.
China’s growing clout in the tech sector is just the latest example of the rapid boom-and-bust growth pattern that characterises the market.
Some investors feel that the sector holds too much risk, while others think compelling fundamentals make emerging markets a sure bet in the long run.
Both of these streams of thought hold true, albeit at different times.
While 2017 proved to be a lucky year for emerging markets, with fund managers rediscovering their enthusiasm for the sector, 2018 so far has brought a sell-off, the collapse of the Turkish and Argentinian currencies and threats of a trade war.
The MSCI Emerging Markets index has been gradually falling since the start of the year and is now 7.86% down from where it was at the end of last year. However, despite the turmoil, there are still managers who are capable of turning out excellent returns.
This article was originally published in the October issue of the Citywire Switzerland magazine.