Podcast: Buffers Built to Counter Global Challenges?

Challenges remain in 2022, but prudent action already taken by central banks leaves emerging markets well-prepared. Hear from Portfolio Managers, Grant Webster and Archie Hart, as they assess the outlook for emerging markets.

January 27, 2022

The fast view

Emerging market (EM) economies have emerged from the pandemic in a far healthier condition than was initially feared.
EM central banks have acted prudently – and far more quickly than their developed market peers – lifting rates to levels more appropriate for the inflationary conditions. Spreads are at historically wide levels.
This building of buffers and resilience should help them weather two major challenges: tightening global liquidity in conjunction with slowing growth, and the weakening growth outlook in China.
By the second half of 2022, we will likely feel the strong base effects of the sharp rise in inflation seen in 2021.
We believe there should be opportunities in EM dollar debt, particularly high-yield countries. In equities, aligning portfolios with government priorities is a prudent approach; the key, as always, is to remain selective.

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