Invest
Emerging market equities gain traction in post-pandemic world
Emerging market equities are making a comeback as technology-savvy consumers flock to capitalise on new opportunities that the 2020 pandemic may have made too attractive to ignore.
Emerging market equities gain traction in post-pandemic world
Emerging market equities are making a comeback as technology-savvy consumers flock to capitalise on new opportunities that the 2020 pandemic may have made too attractive to ignore.

Technology-savvy consumers in economies that have reopened and are in post-COVID-19 recovery phase, namely China, Taiwan and South Korea, are fuelling a revival within emerging market equities, according to American Century Investments’ senior portfolio manager, Patricia Ribeiro.
“Young, fast-growing populations are about to become middle class consumers. COVID-19 has spawned a genuine stay at home culture, whether it be remote learning, virtual medical visits, working and shopping from home. And there’s a huge opportunity for investors to capitalise on this structural shift,” she said.
“Emerging market economies represent 80 percent of the world’s population, making younger, connected consumers key to domestic demand. Investment inflows are now starting to reflect this trend.”
And, according to FactSet, the second quarter of 2020 proved to be the best-performing quarter for emerging market equities in more than a decade, with the MSCI Emerging Markets Index up another 10 per cent in the third quarter (as of October 2020).

Ms Ribeiro believes China has arguably had the best response to the pandemic, with domestic activity already normalising.
“China has left behind the worst of its COVID-related impacts and is well ahead of other jurisdictions, both in emerging and non-emerging economies,” she said.
“From an equity perspective, that’s leading to increased production, manufacturing and consumption – and earnings growth has recovered in response. The prospect of a recovery in emerging market equities is quite compelling, particularly in an economy like China’s.”
She believes this momentum is set to continue as investor sentiment improves.
“We believe this momentum is set to continue as investor sentiment improves. When combined with extraordinary fiscal and monetary stimulus from global central banks in response to COVID, global liquidity could potentially sustain – if not lift – emerging market equities even further,” she said.
According to Ms Ribeiro, valuations in the asset class – compared to developed markets – also continue to trade at a discount to historical averages.
“Strong headwinds do still remain, and while China’s domestic activities have normalised, caution is still required, particularly until such time as the virus is fully contained,” she said.
“Ultimately, however, the sheer volume of emerging market consumers now shopping, working and schooling online, means investors are increasingly considering the merits of emerging market equities.”
About the author

About the author


Stock market
International stocks: Diversifying your portfolio beyond Australia
In an increasingly globalized market, Australian investors have the opportunity to enhance their investment portfolio by incorporating international stocks. Diversifying your investments globally can ...Read more

Stock market
Stock market rally likely to continue regardless of Fed minutes tone, says deVere CEO
The bull run that has propelled Wall Street's major indexes to record highs this month is expected to continue regardless of the tone of the upcoming Federal Reserve minutes, according to Nigel Green, ...Read more

Stock market
US stock rally driven more by valuation growth than earnings, leaving tech names vulnerable: Innova
The strong gains in US stocks over the past year, particularly in the technology sector, have been driven more by expanding valuations than underlying earnings growth, leaving them exposed to a ...Read more

Stock market
Sun Silver to make its ASX debut with a $13 million IPO
Sun Silver Limited (proposed ASX Code: "SS1") has announced the opening of its Initial Public Offering (IPO) today, aiming to raise a minimum of $10 million and a maximum of $13 million (before costs)Read more

Stock market
Nasdaq hits record high, underscores the value of tech in investment portfolios
The Nasdaq Composite's surge to an all-time high last Friday highlights the importance of incorporating technology into investment strategies. Read more

Stock market
Apple sets an unprecedented profit pace within the GAFAM group in 2023
After navigating through the economic difficulties presented in 2022, the technology sector has demonstrated resilience and growth, with many companies seeing increases in revenue and stock value. Read more

Stock market
Fintech startup okoora unlocks over $3 billion in forex savings for businesses
Fintech innovator okoora has announced it has saved customers a monumental amount over $3 billion through international foreign exchange transactions. Read more

Stock market
Google's Gemini edges out ChatGPT4 in groundbreaking AI showdown
Google's latest AI model, Gemini, has edged out OpenAI's ChatGPT4 in a recent set of rigorous multi-discipline tests, marking a significant milestone in the large language model (LLM) sector. Read more

Stock market
International stocks: Diversifying your portfolio beyond Australia
In an increasingly globalized market, Australian investors have the opportunity to enhance their investment portfolio by incorporating international stocks. Diversifying your investments globally can ...Read more

Stock market
Stock market rally likely to continue regardless of Fed minutes tone, says deVere CEO
The bull run that has propelled Wall Street's major indexes to record highs this month is expected to continue regardless of the tone of the upcoming Federal Reserve minutes, according to Nigel Green, ...Read more

Stock market
US stock rally driven more by valuation growth than earnings, leaving tech names vulnerable: Innova
The strong gains in US stocks over the past year, particularly in the technology sector, have been driven more by expanding valuations than underlying earnings growth, leaving them exposed to a ...Read more

Stock market
Sun Silver to make its ASX debut with a $13 million IPO
Sun Silver Limited (proposed ASX Code: "SS1") has announced the opening of its Initial Public Offering (IPO) today, aiming to raise a minimum of $10 million and a maximum of $13 million (before costs)Read more

Stock market
Nasdaq hits record high, underscores the value of tech in investment portfolios
The Nasdaq Composite's surge to an all-time high last Friday highlights the importance of incorporating technology into investment strategies. Read more

Stock market
Apple sets an unprecedented profit pace within the GAFAM group in 2023
After navigating through the economic difficulties presented in 2022, the technology sector has demonstrated resilience and growth, with many companies seeing increases in revenue and stock value. Read more

Stock market
Fintech startup okoora unlocks over $3 billion in forex savings for businesses
Fintech innovator okoora has announced it has saved customers a monumental amount over $3 billion through international foreign exchange transactions. Read more

Stock market
Google's Gemini edges out ChatGPT4 in groundbreaking AI showdown
Google's latest AI model, Gemini, has edged out OpenAI's ChatGPT4 in a recent set of rigorous multi-discipline tests, marking a significant milestone in the large language model (LLM) sector. Read more