Overweight Emerging Markets: Stronger Fundamentals & Lower Valuations

By Aline Wealth Management on December 20, 2018

As the charts below show the Emerging Markets are presenting an unusual buying opportunity—they are economically and fundamentally better performers but are trading at a substantial discount to historical valuations. Part of this weakness has to do with the over-reaction from “Trade Wars” and currency volatility—however, we believe these issues are temporary and that fundamentals will prevail.

Emerging Markets are Responsible for a Larger Share of Global GDP

 

 

Emerging Market Debt Levels vs GDP are Substantially Lower Than Developed Countries

 

 

Better Growth and Higher Operating Margins

 

Despite these favorable economics and operating metrics shares in EM are trading at a substantial discount to developed markets—an opportunity rarely offered to investors with a keen eye for value.

 

 

Time to Catch Up to the Over-Debted Developed Markets

As of 4th Quarter 2018


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