Emerging Markets: Opportunities and the Road Ahead

Our Emerging Markets Equity CIO Manraj Sekhon provides the team’s midyear outlook, including how secular trends driving opportunities in emerging markets have accelerated because of the COVID-19 crisis. Want even more perspective? Check out our Global Investment Outlook: Risk, Recovery and New Market Realities.

With the spread of COVID-19 having slowed in recent months, the focus of policymakers and markets has started to shift from the immediate needs of the health crisis towards the economy. Across both developed and emerging markets we are seeing containment, albeit with uneven progress, and economies globally are starting to reopen.

Consensus suggests that a potential vaccine is at least 12 to 18 months away—and in the interim countries will need to start operating effectively again, whether from a health, social or governance perspective. The long-term—and far-reaching—economic consequences of lockdowns will also become clearer and need to be managed.

There is no clear template that any country can follow in dealing with this crisis, but several factors have been shown to successfully drive containment. Decisive policymaking paired with effective execution have been crucial, alongside social cohesion and economic resilience.

As we look to 2021 and beyond, we think these attributes will help countries get through the immediate crisis, while those economies and companies with sustainable comparative advantages will weather what is likely to be an extended period of weaker economic performance.