Aberdeen Emerging Markets – The stars may be aligning
Year to date, Aberdeen Emerging Markets (AEMC) has been performing well, outstripping both its benchmark and the average of competing funds by some margin (see page 9). The members of the investment management team, who predicted a resurgence in AEMC’s performance in 2019, believe there is more to come over the remainder of the year. They highlight that, globally, investors still have an underweight exposure to emerging markets. In addition, the recent interest rate cut in the US could signal a halt to US dollar strength, to the benefit of emerging market currencies and stock markets.
That said, as the US/China trade war rumbles on and accusations of currency manipulation are bandied about, Chinese growth is slowing. The best-performing markets of recent times have been in South America and EMEA (Europe, Middle East and Africa). Now is when a manager of a global emerging markets fund that can add value through its asset allocation decisions earns its keep.