Emerging Market Countries Best Poised To Weather The End Of Easy Money

In addition, we continue to believe that EM equities overall look cheap considering their relative growth potential and healthy corporate profits, and have the potential to outperform their developed market counterparts over the next several years.

To be sure, when tapering eventually happens, the degree of capital outflow from emerging economies will depend on the pace of Fed tapering and the expected path of rates. If tapering turns out to be extremely gentle and rates expectations remain close to zero, we may not see as much of an impact on emerging markets in general as we did this spring.

Sources: September Investment Directions, Bloomberg

Russ Koesterich, CFA, is the Chief Investment Strategist for BlackRock and iShares Chief Global Investment Strategist. He is a regular contributor to The Blog and you can find more of his posts here.

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