Emerging Markets Poised to Rebound in 2023 After Struggles, Offering Investors Potential Upside
• Emerging markets (EM) struggled in 2022 due to high US interest rates, slump in China's economy, inflation, etc. But they are poised to rebound in 2024 with potential Fed rate cuts.
• EMs are undervalued compared to US stocks and can rally in a global market relief. A weaker US dollar and stable rates also benefit EMs.
• Falling inflation and higher projected economic growth make the growth outlook better for emerging economies like India and Brazil versus developed markets.
• Some EMs like Taiwan and South Korea have benefited from the tech boom, while China still faces property crisis and regulatory uncertainty risks.
• EM ETFs like Rayliant Quantamental Emerging Market ex-China Equity ETF, iShares Emerging Markets Dividend ETF and Columbia EM Core ex-China ETF have gained 15-20% in 2023.