Emerging Markets in your SAA

Hockey Monkey · 19th Mar, 2022

Redwing said: ↑

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Yet China stock market returns have been terrible over that period. GDP != Stock Market returns

Two charts that show why you should ignore China’s index - Schroders global - Schroders

Nodrog · 24th Mar, 2022

I personally sleep very well with our decision not to own Emerging Markets equities.

The risk rally is back, for a while

... This is not just a moral or ethical issue: it should be patently obvious that if you cannot have confidence in the rule of law, property rights, and the enforceability of contracts in countries run by despots and dictators, then you cannot invest in equity or debt instruments issued by them (or by companies based in these nations).

Global markets clearly have had large lazy longs in Russia and China because assets located in these regions appear superficially cheap. But is impossible to monetise these opportunities when the country in question unilaterally appropriates your assets, bans investors from exiting, as both Russia and China have done (in 2015 in China's case), and/or Western states force you to dispose of these assets at precisely the time that there is no durable bid for them.

Scores of large offshore and local institutional investors are presumably sweating on their horrific Russian losses and wondering which country could be next. Well, if President Xi does indeed attempt to forcibly unify with a resistant Taiwan, as he has promised during his term in office, we will see the West applying exactly the same playbook, albeit with even greater force. The West has arguably much more at stake with Taiwan.

This is starting to precipitate an exodus of capital out of China as the uninvestable nature of non-democratic states dawns on investors (witness the enormous decline in Chinese tech stocks and huge increases in credit spreads on Chinese bonds).
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Emerging Markets in your SAA

Do you hold EM in your portfolio?

I use VGE

I use VAE

I use other products for EM

I do not have EM in my portfolio

Hockey Monkey Well-Known Member

Nodrog Well-Known Member

Log in or Sign up

Emerging Markets in your SAA

Do you hold EM in your portfolio?

I use VGE

I use VAE

I use other products for EM

I do not have EM in my portfolio

Hockey Monkey Well-Known Member

Nodrog Well-Known Member

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