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Commentary

China’s new development strategy: greener, less unequal, more sustainable

The country’s leadership has designed a new development model, based on a ‘common prosperity’ philosophy, aimed at modernising the economy by improving the country’s future demographic profile via lowering inequality and promoting sustainable, even if slower, GDP growth which is both less dependent on financial leverage and in harmony with nature.

Commentary

Measuring EM Stocks’ Undervaluation

What is the degree of Emerging Markets (EM) stocks’ undervaluation relative to United States (US) equities?

Commentary

Opportunities In Local Currency Assets After The Sharp Dollar Move

The Fed meeting last week led to higher asset price volatility across asset classes.

Commentary

US Inflation Unlikely to Pose a Serious Threat to EM

Inflation is likely to remain high in 2021. The primary source of price pressures is the rebound in commodity prices after their sharp collapse last year.

Commentary

Seven Policy Proposals to Meet the Paris Agreement Objectives

The 2015 Paris Agreement introduced the legally binding goal of maintaining the average global temperature below the pre-industrial revolution average plus 2o Celsius in order to avoid severe stress on natural and socioeconomic systems.

Commentary

EM Is No Longer a Commodity Play

The Emerging Markets (EM) asset class is often labelled a commodity play for investment purposes. The argument is simple and directional; EM countries export commodities, so rising commodity prices are good for the asset class, whereas falling commodity prices hurt EM countries.

Commentary

Equity Outlook 2021: Emerging Markets

2020 will live long in memory, and so it should. EM have navigated, and in some cases excelled, during the most challenging stress test in recent history. The crisis will ultimately prove temporary, in our opinion, and 2021 is well placed to be a year of recovery.

Commentary

2021 Outlook: Seven Themes for a Post-Vaccine World

Science is winning the battle against the covid-19 coronavirus. The advance in therapies has already contributed to a significant reduction in hospitalisation and fatality rates vis-à-vis the number of cases, while the multiple of approved and soon to be approved vaccines puts the livelihoods of billions of people on track to normalise in 2021.

Commentary

US Elections and EM

Noise levels are likely to remain elevated in the run-up to – and possibly in the immediate aftermath of the upcoming US presidential election, but the post-election outlook should prove positive for EM assets by ushering in a period of more positive risk-sentiment, a long period of low US rates and a lower Dollar.

Commentary

The Case for EM Investment Grade USD Bonds

Overall, EM IG bonds represent a great opportunity for investors seeking to monetise the EM risk premium with moderate volatility in a world, where higher yielding IG-rated securities are increasingly difficult to come by.

Commentary

The EM Fixed Income Universe

Welcome to the 9th annual review of the Emerging Markets (EM) fixed income asset class. Using new data from the Bank of International Settlements and other sources, we establish that the EM bond market has expanded by 12% in Dollar terms in the past twelve months to a size of USD 29.6trn, or 25% of the global fixed income universe as of the end of 2019.

Commentary

Is 9 Times More Yield Enough for You?

Does 9 times higher yield in EM than in US bonds make for an attractive investment proposition? We lay out the arguments. 

Commentary

The China Witch Hunt

The common characterization of US-China relations as a new Cold War is wrong. Instead, the most recent spike in tensions between the two countries – the second time this has happened since US President Donald Trump took office in 2016 – is primarily motivated by political considerations ahead of the November US presidential election.

Commentary

Status Update: Coronavirus and EM Fixed Income in 2020 and Beyond

As of 27 April 2020, eighteen times more people have died from coronavirus per million of the population in developed countries (DMs) than in Emerging Markets (EM). This is partly due to measurement problems, but there may also be genuine structural reasons for expecting slower spread, less overall incidence, and lower mortality rates in EM countries than in DMs.

Commentary

The Triple Shock and EM Equities: First-In First-Out?

Global stock markets have been struck by a triple shock; global pandemic, energy price war and market rout from full valuation levels in developed markets. Each of these types of shocks has been seen, and recovered from, previously.