Welcome to Extreme Investor Network! Today, we are diving into the exciting world of investing in emerging markets with insights from Christine Phillpotts, a portfolio manager at Ariel Investments.
Phillpotts believes that a lower rate environment in the current year will provide a boost to the investment thesis for emerging markets. In a recent conversation with CNBC’s Mike Santoli, she highlighted several reasons why emerging markets are poised to outperform in 2024 and beyond.
One key factor Phillpotts pointed out is the potential increase in investor flows to ex-U.S. regions, including emerging markets, as a result of lower interest rates. With the recent release of a weaker-than-expected labor market report, there are indications that the Federal Reserve may embark on a rate-cutting campaign, further supporting this trend.
Moreover, Phillpotts noted that valuation discounts for emerging market equities are currently at all-time lows compared to the S&P 500, presenting compelling opportunities for investors. She also emphasized that earnings growth in the emerging markets space has been accelerating.
For those interested in investing in artificial intelligence beneficiaries, Phillpotts highlighted the opportunities within picks-and-shovels plays that are crucial to the AI revolution. These companies, she explained, are integral to the ongoing infrastructure deployment and are available at attractive valuations relative to developed markets.
In terms of performance, the Ariel Emerging Markets Value strategy has seen strong returns, outpacing the MSCI EM Net Index and the MSCI EM Value Net Index. Similarly, the ex-China strategy has also delivered impressive results in 2024.
In addition to her insights on emerging markets, Phillpotts discussed other intriguing investment opportunities, including the potential in Chinese equities during times of fear, the contrarian play in Korean banks, and the prospects for investing in copper.
Stay tuned to Extreme Investor Network for more expert analysis and unique perspectives on the world of investing in emerging markets and beyond. Happy investing!
