May 21, 2020 | US Equities
“All investing is value investing” according to Charlie Munger, with today’s market continuing to offer more value from the mispricing of existing company assets relative to growth assets. Firstly it is important to point out that exceptionally cheap value stocks are...
Nov 27, 2019 | Emerging Markets
We continue to favour EM sovereign debt as an alternative to stretched developed-market debt. We like the higher initial yields on offer and potential capital upside from monetary easing and rolldown from steeper yield curves (top-left chart). If we looked only at...
Nov 6, 2019 | Emerging Markets
Since the peak back in April, most EM equities markets have seen declines or consolidation (top-left chart). The temptation is to view this as a buying opportunity to front-run more aggressive central bank easing (especially from eg the PBoC in China). Although we...
Aug 2, 2019 | Emerging Markets
The abrupt shift in G10 monetary policy expectations has not only triggered a substantial repricing of long-end rates, but it has also underpinned a reduction in credit risk-premiums. This is particularly evident for emerging-market sovereign issuers where the cost of...
May 10, 2019 | Emerging Markets
Last month we warned that the signals from our EM crisis framework were painting a mixed picture of the Turkish economy, which suggests that investors should stay on the sidelines for now. There has been little improvement since then, with credit default swaps...
Mar 22, 2019 | Emerging Markets, UK
This post was taken from our March 5th weekly report. In line with rebounding equity markets following the 4Q18 correction, credit risk-premia have compressed sharply. This is particularly notable for the big political risk plays of 2018. UK CDS spreads have narrowed...
Nov 30, 2018 | Emerging Markets
We have previously highlighted that despite the global equity selloff there has been only a marginal decline in flows to emerging market equity ETFs, which suggests that investors remain committed for the time being. We have dug further into fund flows for Brazil and...
Sep 28, 2018 | Emerging Markets
In an almost textbook fashion, a stronger dollar and rising US rates has triggered a broad emerging market sell-off and surge in volatility. However, somewhat atypically there is little evidence so far of foreign capital bolting for the exit, despite the gradual...
Sep 21, 2018 | Emerging Markets
Credit risk in emerging markets has long been mispriced as the impact of unprecedented monetary stimulus and record low policy rates seemingly placated concerns about higher leverage. However, with the rise in US rates claiming its first casualties (Argentina and...
