Preview
2024 was a year of positive equity momentum globally. While US markets dominated, Emerging Markets (EM) offered meaningful returns which outperformed most developed international markets.
In this 2025 global emerging markets outlook:
Martin Currie is excited for 2025 and beyond: Strong economic growth, improving inflationary environment and easing interest rates should be supportive of EM equities in 2025. They think markets will refocus on company fundamentals and that the key building blocks for growth are those operating in the following areas.
EM is integral to artificial intelligence (AI) innovation: EM has depth and breadth of exposure to the AI value chain. The life cycle of AI adaption creates opportunities over varying time horizons: early, mid and later stages of AI development. Geographic diversification remains crucial across EM to capture the range of opportunity.
A return to fundamentals in India is possible: Martin Currie believes India has the potential to drive returns in EM over the next decade as structural growth opportunities come to fruition and companies rise to the challenges presented to them.
Policy should continue to support Chinese equities in 2025: In 2024, Chinese equity market performance began to recover as market participants started to recognise company fundamentals once again. While the past few years have seen equities driven largely by sentiment, Chinese companies have been delivering operationally with strong earnings growth. Despite the rally in 2024, Martin Currie believes there is a long runway for further growth, and they look forward to seeing this materialise in 2025.
Long-term investment outlook for EM is positive: Despite significant variation in individual performance, share prices have responded logically to considerable changes in investment conditions, both nationally and sectorally.
WHAT ARE THE RISKS?
All investments involve risks, including possible loss of principal. Past performance is no guarantee of future results. Please note that an investor cannot invest directly in an index. Unmanaged index returns do not reflect any fees, expenses or sales charges.
Equity securities are subject to price fluctuation and possible loss of principal. Large-capitalization companies may fall out of favor with investors based on market and economic conditions. Small- and mid-cap stocks involve greater risks and volatility than large-cap stocks.
International investments are subject to special risks including currency fluctuations, social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets.
Commodities and currencies contain heightened risk that include market, political, regulatory, and natural conditions and may not be suitable for all investors.
US Treasuries are direct debt obligations issued and backed by the “full faith and credit” of the US government. The US government guarantees the principal and interest payments on US Treasuries when the securities are held to maturity. Unlike US Treasuries, debt securities issued by the federal agencies and instrumentalities and related investments may or may not be backed by the full faith and credit of the US government. Even when the US government guarantees principal and interest payments on securities, this guarantee does not apply to losses resulting from declines in the market value of these securities.
There are special risks associated with investments in China, Hong Kong and Taiwan, including less liquidity, expropriation, confiscatory taxation, international trade tensions, nationalization, and exchange control regulations and rapid inflation, all of which can negatively impact the fund. Investments in Taiwan could be adversely affected by its political and economic relationship with China.