Why volatility is an advantage in EM
Volatility is nothing new for emerging markets, however for Portfolio Manager, Amit Goel this has always seen this an opportunity to drive returns. Find out why.
Want more?
All information is current as at its published date unless otherwise stated.
This document is issued by FIL Responsible Entity (Australia) Limited ABN 33 148 059 009, AFSL No. 409340 (‘Fidelity Australia’). Fidelity Australia is a member of the FIL Limited group of companies commonly known as Fidelity International. Prior to making any investment decision, investors should consider seeking independent legal, taxation, financial or other relevant professional advice. This document is intended as general information only and has been prepared without taking into account any person’s objectives, financial situation or needs. You should also consider the relevant Product Disclosure Statements (‘PDS’) for any Fidelity Australia product mentioned in this document before making any decision about whether to acquire the product. The PDS can be obtained by contacting Fidelity Australia on 1800 044 922 or by downloading it from our website at www.fidelity.com.au. The relevant Target Market Determination (TMD) is available via www.fidelity.com.au. This document may include general commentary on market activity, sector trends or other broad-based economic or political conditions that should not be taken as investment advice. Information stated about specific securities may change. Any reference to specific securities should not be taken as a recommendation to buy, sell or hold these securities. You should consider these matters and seeking professional advice before acting on any information. Any forward-looking statements, opinions, projections and estimates in this document may be based on market conditions, beliefs, expectations, assumptions, interpretations, circumstances and contingencies which can change without notice, and may not be correct. Any forward-looking statements are provided as a general guide only and there can be no assurance that actual results or outcomes will not be unfavourable, worse than or materially different to those indicated by these forward-looking statements. Any graphs, examples or case studies included are for illustrative purposes only and may be specific to the context and circumstances and based on specific factual and other assumptions. They are not and do not represent forecasts or guides regarding future returns or any other future matters and are not intended to be considered in a broader context. While the information contained in this document has been prepared with reasonable care, to the maximum extent permitted by law, no responsibility or liability is accepted for any errors or omissions or misstatements however caused. Past performance information provided in this document is not a reliable indicator of future performance. The document may not be reproduced, transmitted or otherwise made available without the prior written permission of Fidelity Australia. The issuer of Fidelity’s managed investment schemes is Fidelity Australia.
© 2024 FIL Responsible Entity (Australia) Limited. Fidelity, Fidelity International and the Fidelity International logo and F symbol are trademarks of FIL Limited.
Well, emerging markets have been very volatile over the last 12-15 months. But volatility is nothing new to emerging markets. We have seen over the last five or ten years that emerging markets have been fairly volatile versus developed markets. And as investors, volatility for us is always an opportunity. If you look back in the last 12 months, you have seen various drivers that has affected emerging markets. You had the US Fed increasing rates and US dollar appreciation, which always caused emerging market currencies to be more volatile and outflows from emerging markets. On top of it, you had geopolitical events in Russia and Ukrain, and China and Taiwan, which again impacted emerging markets. And lastly, it was a very dramatic COVID situation in China. And all these factors led to emerging markets underperforming developed markets for the first 9-10 months of 2022. But what we saw in the last two months is that China had a clear path out of COVID and that led the emerging markets benchmark to go up by 15-20%. And it has erased all its underperformance of the last 12 months, which always again shows us that volatility in emerging markets is a very important constituent of it driven by various drivers. But as investors, we can benefit from this volatility and this is again an opportunity for us to drive value for our clients.
24 February 2023
Amit Goel
Lead-Portfolio Manager, Fidelity Global Emerging Markets Strategy and Portfolio Manager, Fidelity India Fund
