Henderson Global Investors’ £17.28 billion (€20.77 billion or US$28.62 billion) fixed income business has hired Steve Drew as Head of Emerging Market Credit. He will work alongside Stephen Thariyan, Global Head of Credit, and Phil Apel, Head of Fixed Income, in building out the emerging market credit team.
Most recently Steve was Partner and Head of Global and Emerging Credit at Thames River Capital and managed in excess of £1.5bn (€1.8bn or US$2.4bn), c.£750m (€900m or US$1.2bn) of which was in emerging market credit. Steve has over 20 years of global credit experience across buy and sell-side businesses such as JP Morgan Chase and Tudor Capital.
Commenting on the appointment, Stephen Thariyan said, “Steve brings valuable investment knowledge, client relations and management skills to the team. His understanding of the emerging market credit sector, together with his impressive track record with client money and proven ability to help raise assets, will be hugely beneficial as we focus on expanding the scale of our fixed income franchise globally.”
“We will actively seek to apply Steve’s expertise to our existing portfolios for the benefit of our clients as his approach to investing, combining top down macroeconomic perspectives with security selection, fits well with our established method. During 2014 we plan to hire an investment team specialising in emerging market credit to support Steve. This will give us the background to launch products in the area.”
Steve Drew added: “Henderson has an excellent reputation in the credit market and the wider fixed income team is one of the most respected in the industry. My choice to join was also based on the strong collective belief that emerging market credit forms an imperative part of Henderson’s future business strategy. This is an exciting time for Henderson and I look forward to working with Stephen and the team.”
Amy Lo has taken over from Allen Lo as UBS Wealth Management’s chief executive officer (CEO) in Hong Kong, according to information published in several media.
The outgoing Lo, who has been in the role since October 2009, is retiring. Edmund Koh, CEO of UBS Wealth Management in South-east Asia and Asia Pacific Hub, will assume Lo’s responsibilities as deputy CEO of wealth management in Asia Pacific.
For the incoming Lo, she moves into her new role from her position of head of UBS’ ultra high net worth group in Asia Pacific. She first joined UBS in 1995.
Photo: HipolitoLuiz, Flickr, Creative Commons.. How Millionaires Invest
According to the new Legg MasonGlobal Investor Survey of 4,320 affluent investors from 20 countries, the vast majority (80.2%) said they were optimistic about investments over the next twelve months. The majority of respondents said they intend to maintain their current asset allocations; however, greater than one-third (37.1%) said they intend to increase their allocation to equities – more than those increasing their allocation to cash (36.8%) or any other asset class.
The top five investments that investors believe offer the best opportunity over the next twelve months are:
Domestic stocks
Real estate
Cash
Precious metals including gold
Domestic bonds
The average asset allocation among all respondents globally consists of:
26.5% cash or cash equivalents
24.7% equities
19.9% fixed income
16.8% investment real estate
6.8% non-traditional investments
5.2% other
“Our survey found a level of optimism shared by investors around the world that is very encouraging,” said Matthew Schiffman, managing director and head of global marketing at Legg Mason Global Asset Management. “The fact that more said they are adding equities, and they believe domestic stocks present the best opportunity, says their optimism could translate into a change in investment behavior that may play out in the equities market.”
Income important but income gap remains a challenge
Seven out of ten (71%) investors said that having income generating investments in their portfolio is an important priority. Yet global investors said the income they are generating continues to fall short of their goals.
More specifically, according to the survey the average rate of return global investors seek to achieve on income-producing investments is 9.5%; but the actual rate of return they receive is 6.2%, creating an income gap of 3.3%.
Investing internationally: increasing interest in US and China
More than three-quarters (78.7%) of survey respondents said they invest outside of their home country with an average allocation of 16.5% to international investments. Those who invest internationally or are likely to do so see the following countries as presenting the best investing opportunities over the next 12 months:
US (51.7%)
China (50.1%)
Emerging markets (45.3%)
Europe excluding UK (35.2%)
Growth, retirement top goals but achieving a challenge
Asked to identify their primary goals of investing, almost three-quarters (73.7%) said “grow my wealth” was their top investment goal, followed by “provide for my own retirement” (61.7%) and “protect my wealth” (58.5%). However, many investors are not doing very well in making progress toward their goals; many are only doing “somewhat” well.
More specifically:
46.9% admit they are doing not well or only “somewhat” well in achieving their goal to “grow my wealth”
41.9% said they are doing not well or only “somewhat” well at achieving the goal to “provide for my own retirement”
39.5% said they are doing not well or only “somewhat” well at “protecting their wealth”
Only 19.6% said they are doing “extremely well” in their progress toward achieving their goal to “provide for my own retirement.” Further, more than half (56.6%) said they are only “somewhat confident” that they will have enough money to “live the lifestyle they want in retirement,” while 28.3% said they were “very confident.”
“When it comes to achieving your retirement goals, only doing ‘somewhat well’ or being ‘somewhat confident’ is concerning,” Mr. Schiffman said. “Investors around the world all have one thing in common – the need for enough assets to provide for their years in retirement. Granted, different countries have different social programs to help their retiree populations, but in the end, our survey found that investors everywhere can, and should, do more to prepare for their retirement. And that includes millionaires.”
How millionaires invest
Included in this year’s Legg Mason Global Investor survey were the responses of 2,164 millionaires– that is, survey participants with over $1 million in total assets measured in US dollars. According to the survey, the average asset allocation of global millionaires is:
25% cash
21.5% equities
19.6% fixed income
18.7% investment real estate
9.1% non-traditional
6.1% other
More than eight in ten (83.2%) millionaires surveyed said they are optimistic about investments over the next year, and 45% said they plan to increase their allocation to equities in the next 12 months – well above the 33.7% of investors below $1 million who said the same.
Millionaires go global for investments
Millionaires are far more likely to be investing outside of their home country than those with fewer assets. More specifically, 88.7% of global millionaires surveyed said they invest outside of their country, compared to 74.6% of investors with less than $1 million. Furthermore, millionaires also have a larger portion of their assets invested outside of their home countries: 20.4% of their assets versus 14.8% for those with under $1 million. Among those millionaires who do invest internationally or are likely to do so, the countries they believe represent the best investment opportunities over the next 12 months are:
US (53.7%)
Emerging markets (45.3%)
China (44.6%)
Europe ex UK (37.8%)
Income gap smaller as millionaires achieve greater return
As a result of receiving greater income from their portfolios, the income gap millionaires are experiencing is smaller than that of investors around the world with fewer than $1 million in assets.
The average rate of return millionaires seek to achieve from income-producing investments is 9.6%, close to the 9.5% for those with less than $1 million in assets. Millionaires reported the actual rate of return they receive is 7% compared to 5.8% for those with fewer assets. As a result, the income gap for millionaires is 2.6%, while the income gap for investors with fewer assets is 3.7% – a 110 basis point difference.
According to the survey, millionaires are more focused on growing their assets than protecting their assets. Specifically, asked to identify their primary goals of investing, the millionaires said:
Grow my wealth (70.9%)
Protect my wealth (60.5%)
Maintain my current lifestyle later in life (55.4%)
Provide for my own retirement (53.3%)
When it comes to retirement, 45% of millionaires around the world said they are only “somewhat” confident in their “ability to retire at the age they want to” and 18.6% are not confident. Just over one-third (36.5%) said they were very confident. Asked to define the decisions they made that have had “the most positive impact on investing success,” millionaires point to the following top five decisions:
Developed a financial plan (43.9%)
Invested in products other than stocks and bonds (35.4%)
Took cash off the sidelines and invested it (34.8%)
Changed my spending habits so I could save/invest more (32.2%)
BNY Mellon Investment Management has announced that Kimberly Mustin has joined the firm as Head of North American Distribution, responsible for leading new business strategy and driving sales, client management and consultant relations efforts across institutional, retirement and retail markets throughout North America.
“Kim has significant leadership experience in all three North American markets and has succeeded within a multi-boutique investment management structure,” said PeterPaul Pardi, BNY Mellon’s Global Head of Distribution. “We are delighted to have Kim lead our North American efforts, and are confident she will further enhance our ability to build a market-leading organization focused on delivering outstanding investment solutions to our clients from across our specialist boutiques.”
In North America, Mustin will oversee centralized distribution and consultant relations across Dreyfus, BNY Mellon Retirement, and Institutional markets. Working closely with BNY Mellon’s investment boutiques, as well as Investment Management’s product and marketing leadership, she will lead the strategic plan for the North American distribution business. She will be based in New York and report to Pardi.
Mustin joins BNY Mellon most recently from Oppenheimer Funds where she was Head of Global Strategic Accounts since 2010, leading all institutional buyer groups including institutional, retail home offices, third party and global private banking platforms. Prior to Oppenheimer, Mustin was with Legg Mason, serving as both Head of Institutional and Co-Head of Americas Distribution for Legg Mason affiliates. Throughout her career of consistently progressive sales leadership positions, Mustin headed the Financial Institutions Group at Deutsche Bank, led Consulting and Relationship Management for Retirement at Scudder Investments, was a Principal at State Street Global Advisors and a Senior Consultant at Putnam Investments. She began her career as an Agent with the US Treasury Department.
“We are working continuously to explore, develop and implement enhancements to our distribution efforts globally,” Pardi continued. “These initiatives have enabled us to achieve top 10 sales performance in both the U.K. and Europe in 2013, as well as a top 10 position in the U.S. Retirement market. It’s a thoughtful approach to strategic planning and investment in our platform that will serve Kim well as she leads us forward in North America.”
Wikimedia CommonsPhoto: Popejon2 . SEC Charges Brokerage Firm Executives in Kickback Scheme to Secure Business of Venezuelan Bank
The Securities and Exchange Commission has announced another round of charges in its ongoing case against several individuals involved in a massive kickback scheme to secure the bond trading business of a state-owned Venezuelan bank.
The SEC alleges that two executives at New York City-based brokerage firm Direct Access Partners (DAP) were integral participants in the wide-ranging fraud. Benito Chinea, who was a co-founder and CEO of the firm, and Joseph DeMeneses, who was DAP’s managing partner of global strategy, devised and facilitated sham arrangements to conceal multi-million dollar kickback payments to a high-ranking Venezuelan finance official of the bank. In one instance, DeMeneses made kickback payments from funds he controlled to a shell entity controlled by the Venezuelan official, and Chinea arranged for the firm to reimburse DeMeneses. The allegations were made in a second amended complaint that the SEC submitted in federal court in Manhattan as part of its pending action against four individuals with ties to DAP as well as the head of DAP’s Miami office, who were charged last year for their roles in the scheme.
In a parallel action, the U.S. Attorney’s Office for the Southern District of New York and the U.S. Department of Justice’s Criminal Division today announced criminal charges against Chinea and DeMeneses.
“The corruption at Direct Access Partners reached the very top,” said Andrew M. Calamari, director of the SEC’s New York Regional Office. “The schemers depended on Chinea as CEO to authorize outsized payments from the firm to be funneled as kickbacks to Venezuela.”
The filing of the SEC’s second amended complaint is subject to court approval. The SEC seeks disgorgement of ill-gotten gains plus interest and financial penalties against Chinea, who lives in Manalapan, N.J., and DeMeneses, who lives in Fairfield, Conn., as well as the five previously named defendants with ties to DAP, which has filed for bankruptcy.
The SEC’s investigation, which is continuing, has been conducted by Wendy Tepperman, Amanda Straub, and Michael Osnato of the New York Regional Office, and supervised by Amelia Cottrell. Howard Fischer is leading the SEC’s litigation. An SEC examination of DAP that that led to the investigation was conducted by members of the New York office’s broker-dealer examination staff. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Southern District of New York, the Department of Justice’s Criminal Division, and the Federal Bureau of Investigation.
Foto: Jerry Gunner . Six Reasons Why US Capital Expenditure is on The Rise
In the United States, capital expenditure is lagging the economy as a whole. Some think this is the ‘new normal’. But Robeco’s strategist Peter van der Welle believes there is a strong case for a rebound in investments later this year.
Why investment activity in the US has been subdued
Capital expenditure has been disappointing in recent years. Corporates drastically reduced investments to cut costs following the sharp economic contraction in 2008. On the political front, gridlock on the fiscal situation and ‘Obamacare’ eroded confidence.
The decline in stock prices in 2007-2009 meant that firms that wanted to expand could buy up other companies cheaply and did not need to invest directly in capital goods. In terms of funding, tighter bank lending standards on commercial and industrial loans have also made it more difficult for companies to borrow.
Why investment activity in the US may rebound later this year
It will probably come as no surprise that US investment as a percentage of GDP is still well below historical levels. This situation has spurred an investor debate. Is what we are now facing the ‘new normal’ or just a cyclical trough?
“No”, says Robeco’s strategist Peter van der Welle. “Recent developments in the US economy suggest the tide for capital spending will turn. However, last year, more favorable conditions failed to spur investment growth and market analysts forecasting a pick-up in capital expenditure in 2013 were proven wrong.”
“A combination of pull and push variables could turn the tide for capex”
According to Van der Welle this demonstrates that improvements in one area alone are not enough to trigger the ‘capex call’. A broad-based momentum in the key factors that determine the investment case is required. “We identify a combination of pull and push variables that could turn the tide for capital spending”, says Van der Welle.
Business outlook has gained momentum to spur investments. Economic uncertainty surrounding the US recovery has decreased. Leading indicators have been positive for investment activity for quite a while now. Consumers have deleveraged, US banks have relaxed their lending standards and there is now stronger demand for loans from the industrial sector.
US industrial renaissance could ignite multiplier effects for investment. Growth in strong economic sectors could start a ripple effect, leading to better free cash flow and earnings profiles for related sectors. A good example is shale gas, where abundant supply has caused domestic gas prices to decline and has strongly improved the business case for gas-related industries. The current ongoing industrial renaissance in the US will pave the way for innovation, spurring investment.
Political and economic uncertainty has abated. The gridlock in Congress is over with the Republicans receiving the lion’s share of the blame for the partial government shutdown last November. The hardline Republican stance on fiscal tightening and attacks on ‘Obamacare’ will soften ahead of Congressional elections later this year.
Aging capital stock creates pressure for replacement investments. A push factor for heightened investment activity is aging capital stock. Equipment has not been this old since 1995 and some intellectual-property products date back to the eighties. The delay in replacing buildings and machines will be reversed as higher output levels will become increasingly difficult to achieve with the existing capital stock.
Efficiency gains from existing capital stock are diminishing. The increased efficiency achieved by squeezing the remaining potential out of existing capital stock is diminishing. Businesses will probably need to engage in productivity enhancing capital expenditure, if they are to maintain efficiency advantages. Besides the need to upgrade quality, more capital stock is also required, given that industrial capacity utilization rates in the US have risen above their cyclical average.
More investor pressure for capex. Investors are increasingly encouraging corporate management to pursue growth opportunities. This could encourage firms to increase M&A or stimulate organic growth through direct capital spending on equipment, software and intellectual property rights.
Van der Welle: “Although political developments and healthy corporate balance sheets are important, a broader range of positive conditions are required to trigger a ‘capex call’. Based on these six arguments, we think a rebound later this year is likely and that the lackluster US capital expenditure of the last five years is not a prelude to the ‘new normal’.”
Wikimedia CommonsFoto: Camdiluv, Flickr, Creative Commons.. La rotación hacia acciones y sectores más defensivos puede ser inminente
Investor confidence in global economic growth remains high even as expectations of higher short-term rates increase, according to the BofA Merrill Lynch Fund Manager Survey for April.
The survey, taken between April 4 and April 10, 2014 with an overall total of 239 panelists with US$674 billion of assets under management, showed that the number of investors believing the global economy will grow over the next 12 months was steady at a bullish net 62 percent, unchanged from March and higher than the 56 percent in February. That view supports expectations for profits – a net 44 percent of investors believe profits will improve over the next 12 months, up from 40 percent in March and the same as in February.
However, expectations of higher short-term rates are growing with a net 66 percent believing short rates will rise over the next 12 months, up from 55 percent in both March and February and the highest in three years. This expectation of normalizing monetary policies, though, hasn’t changed sentiment on long-term rates much – a net 72 percent believes they’ll be higher in 12 months, down slightly from 74 percent in March and 73 percent in February. Taken together, expectations for a steeper yield curve are falling away. A net 22 percent of investors are expecting a steepening compared with 39 percent in March and 42 percent in February.
There was a big change in sentiment among investors when choosing between value and growth stocks. In April, a net 40 percent believed value stocks will outperform growth stocks over the next 12 months, more than triple the level in March and an all-time high.
The preference for value might offer one clue to the recent sell-off in technology and biotech stocks. “Recent market volatility has led investors to ‘taper’ their extreme bullishness on U.S. growth-plays and extreme bearishness on emerging markets,” said Michael Hartnett, chief investment strategist at BofA Merrill Lynch Global Research.
Seeking alternative markets
Regionally, a net 66 percent of global fund managers believe the U.S. is still the most over-valued equity market, little changed from March and February. That has many looking again at emerging markets – a net 55 percent think these are undervalued, up from 49 percent in March and the highest reading ever. In addition, only a net 2 percent would like to underweight emerging markets, down sharply from 21 percent in March.
Crowded trades
Fund managers are taking a more guarded view of assets favored in recent years. Topping the list of crowded trades are Long U.S. High-Yield bonds at 22 percent, a notable jump on the 13 percent in March. Also, long peripheral debt was cited as a crowded trade by 19 percent of respondents, up from 16 percent in March.
“After two years of cyclical outperformance in Europe, some of the exuberance we see in investor sentiment and positioning suggests a rotation into more defensive stocks and sectors may be imminent,” said Obe Ejikeme, European Equity and Quantitative strategist.
Abenomics effect wanes
In Japan, the boost provided by the launch of “Abenomics” over a year ago continues to wane. Only a net 13 percent of investors are still overweight Japanese equities, down from 16 percent in March and 30 percent in February. Similarly, a net 16 percent have a favorable outlook for Japanese profits, down from 18 percent in March and 28 percent in February while perceptions of their quality and volatility turn for the worse.
TIAA-CREF, a leading financial services provider, announced today an agreement to acquire Nuveen Investments, a diversified investment management company with approximately $221 billion in assets under management. The acquisition further strengthens TIAA-CREF as a leading provider of retirement and financial services and significantly expands the products and services available to help customers achieve financial well-being at all stages of their lives. Additionally, the transaction adds diversification to TIAA-CREF’s investment and distribution platform while bolstering its award-winning mutual fund offerings.
Nuveen, a trusted industry leader, will benefit from the enhanced resources, scale and strength that the transaction will add to its platform. Nuveen’s clients and the advisors and consultants who serve them will continue to benefit from the firm’s and its affiliates’ commitment to high quality performance, integrity and client service.
TIAA-CREF is acquiring Nuveen from an investor group led by Madison Dearborn Partners, a private equity investment firm, for an enterprise value of $6.25 billion, inclusive of Nuveen’s outstanding debt. Nuveen will operate as a separate subsidiary within TIAA-CREF’s Asset Management business, retaining its current multi-boutique business model and continuing to support its investment affiliates through scaled distribution, marketing and administrative services. John Amboian will remain the chief executive officer of Nuveen, and Nuveen’s current leadership and key investment team will stay in place.
The transaction enhances TIAA-CREF’s position as a world-class financial services organization with broad market presence. TIAA-CREF and Nuveen have highly complementary investment capabilities and distribution reach across a wide range of retail and institutional client segments. The addition of Nuveen brings TIAA-CREF’s total assets under management to approximately $800 billion.
“For nearly a hundred years, we have been wise financial stewards for those who make a difference in the world in the academic and non-profit communities,” said Roger W. Ferguson Jr., president and chief executive officer, TIAA-CREF. “The acquisition of Nuveen can generate greater returns that will benefit our customers. This transaction “reinforces our position as a leading diversified financial services organization with a broad mix of product offerings to serve clients today and those in retirement for decades to come.”
“We are pleased to bring our clients around the globe access to new investments and strategies through our partnership with an experienced, market-tested investment firm like Nuveen,” said Robert Leary, executive vice president, TIAA-CREF, and president, TIAA-CREF Asset Management. “In addition, Nuveen’s strong distribution network will give us growth and scaled presence in several important channels through relationships built around experienced investment managers with strong track records.”
“We are delighted to partner with TIAA-CREF, which stands among the most highly respected financial institutions and possesses an unparalleled pedigree in retirement services and investment management,” said John Amboian, chief executive officer, Nuveen Investments. “The clients of Nuveen, and each of our investment affiliates, will benefit from TIAA-CREF’s support of our multi-boutique approach and from the continuity of our client services, our brands and our professionals, whose interests will remain strongly aligned with our long-term success. Nuveen and TIAA-CREF share similar values and the same high standards of service and we are excited about the opportunity to further serve our clients.” Mr. Amboian continued: “The Nuveen team and I also would like to thank Madison Dearborn for their support and guidance in helping us advance our strategy and grow our business even in the midst of a very challenging and competitive market environment.”
“We are proud of the accomplishments Nuveen has made in recent years and its status as a provider of top performing investment funds,” said Sam Mencoff, co-chief executive officer, Madison Dearborn Partners. “TIAA-CREF is the right home for Nuveen and its investment affiliates moving forward. We thank John and his team for their partnership and we wish them well as Nuveen enters this exciting new chapter.
“The transaction will provide clients with additional investment choices and access to new products. Enhanced investment capabilities from the combination of TIAA-CREF and Nuveen will span both traditional and alternative investments comprising a diversified range of assets including equities, taxable and tax-exempt fixed income and credit strategies, commodities, real estate and real assets.
The transaction gives TIAA-CREF two award-winning mutual fund complexes with $181 billion of aggregate AUM. This year, for the second year in a row, TIAA-CREF was named by Lipper as the Best Overall Large Fund Company, a distinction separately awarded to Nuveen in 2012. Additionally, ninety-eight percent of TIAA-CREF’s mutual funds receive an overall Morningstar rating of three or more stars across all asset classes (As of March 31, 2014, 41% have 3 stars, 42% have 4 stars, and 15% have 5 stars). Ninety percent of Nuveen’s funds have an overall Morningstar rating of three or more stars across all asset classes as of March 31, 2014.
The boards of directors at both TIAA-CREF and Nuveen each have unanimously approved the transaction. The acquisition is expected to be complete by year-end 2014, subject to customary closing conditions.
Lazard acted as lead financial advisor to TIAA-CREF and J.P. Morgan Securities LLC also acted as financial advisor to TIAA-CREF. BofA Merrill Lynch, Wells Fargo Securities, LLC and Citigroup Global Markets acted as financial advisors to Nuveen Investments. UBS Investment Bank, Goldman Sachs & Co. and Moelis & Company acted as financial advisors to the Nuveen management team. Morgan Stanley, Deutsche Bank and RBC Capital Markets acted as financial advisors to Madison Dearborn Partners.
Wikimedia CommonsRoque Calleja. Roque Calleja se incorpora a la oficina de BlackRock en México para desarrollar la relación con las Afores
Roque Calleja has recently moved to BlackRock’s Mexico office as a Vice President, responsible for developing and maintaining relationships with institutional investors in Mexico and Central America.
In this role Mr. Calleja works with clients to provide insight about BlackRock’s active strategies and how these products can deliver desired investment outcomes.
Mr. Calleja’s joins BlackRock’s Mexico office from New York, where he supported BlackRock’s Latin America and Iberia business and was responsible for managing the retail offshore wealth business in the Northeast region, based in New York.
Mr. Calleja’s joined BlackRock in 2009 as a member of BlackRock’s iShares business in Iberia. Mr. Calleja earned a BA degree in business administration and a Master’s degree in Business Strategy from the Francisco de Vitoria university in Madrid, Spain. Mr. Calleja also holds a master’s degree in alternative investments and Hedge Funds by the Instituto de Estudios Bursatiles (IEB) university in Madrid.
Emerging market (EM) equities and bonds have performed remarkably well in the past months. A lot of bad news seems priced in and with lower immediate risk, investors dare to step in again. In this enviroment, ING Investment Management have closed most of the underweight positions in EM but remain cautious for the medium to longer term.
In last week’s Marketexpress we wrote about the surprisingly resilient EM currencies. Despite the seemingly hawkish comments of Fed Chairwoman Yellen and the increasing worries about Chinese growth and its financial system, EM currencies as a whole have appreciated since the second half of March.
EM bonds and currencies perform well since end of January
Policy response China after accumulation of bad news
The asset manager mentioned that one likely explanation for the EM resilience was that the reports from China had become so bad that markets interpreted them as good news: every disappointing figure was one step closer to a policy response. And indeed, last week the Chinese authorities announced a number of stimulus measures which are quite similar to the ‘mini stimulus’ package that was announced last year. The measures include accelerated spending on rail projects and public housing and extended tax relief for small businesses. Although the magnitude and effectiveness of the stimulus should not be overestimated, it should help to underpin the sentiment towards China and emerging markets.
A lot of negative news about EM is priced in
Next to that, after more than a year of strong capital outflows, markets have priced in a lot of negative news. The increasing evidence of financial system stress in China and the aggressive intervention of Russia in Ukraine have been important negative news items in the past months, but failed to push EM currencies significantly lower. This suggests that the downside risk for EM assets is lower than it has been for a while.
You can read the entire article on the attached document.
