Emerging-Market Investors Need New Playbook for Rest of 2020

(Bloomberg) — Monday’s moves in emerging markets may look unexceptional. Drill down, however, and signs of an intriguing shift emerge.

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The benchmark gauge for emerging-market stocks is down 0.5% and its currency counterpart is little changed. That suggests investors are biding their time as they weigh the proliferating risks, from a technology-sector meltdown to U.S.-China tensions.

But broader indexes that average out market moves can mask regional, sectoral and asset-class differentiation. That’s what seemed to be happening since the Thursday selloff in the Nasdaq 100 Index.

There are signs that the laggards of the past five months — currencies as well as stocks outside Asia, especially in non-technology sectors — are starting a phase of outperformance. That is not to say an unqualified rally is on the cards, but just that these assets could perhaps weather the coming volatility better.

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