What distinguishes the Emerging Markets?
Emerging Markets refers to countries that are typically undergoing a transformation from a developing to developed or advanced economy. This convergence and modernisation process opens up great market potential, and Emerging Markets exhibit high growth dynamics. At Raiffeisen Capital Management, we believe that a broadly diversified fund portfolio should also include investments in the Emerging Markets over the medium to long term – if the investor is willing to bear the associated risk. Positive factors are low debt, moderate monetary policy and, as previously mentioned, the potential for strong growth, whereas the economic structures and political systems in these countries are often still in flux. Therefore, Emerging Market funds generally exhibit elevated volatility.
How are Emerging Markets developing?
The past few weeks have been quite a ride: First, China surprised with the announcement of major stimulus packages, which led to a sharp short-term rise in Chinese equities. At the end of October, the much-anticipated summit of the BRICS+ countries took place. At the beginning of November, there was another striking event with Donald Trump's surprisingly clear election victory. This time, we are focusing our update on China.
Countries and regions
Why invest in Emerging Market equities?
For a long time, investments in Emerging Markets provided investors with above-average returns. However, over the last 15 years, only a few Emerging Markets have managed to do so, especially in the equity markets. Are the good times now returning?
Sustainable investments in Asia
Asia is not only the largest and most populous continent in the world, but also the fastest-growing. Despite economic and/or political risks in some places, some economic sectors are growing particularly strongly and offer above-average earnings opportunities.
Invest sustainably in Central and Eastern European equities
Central and Eastern Europe continues to have the best growth prospects in Europe, despite the war in Ukraine. The region attracts investors with mostly attractive equity valuations - not least because many foreign investors continue to wait and see. However, they could also quickly abandon their caution under certain circumstances.
Invest sustainably in Eastern European equities
The equity fund Raiffeisen-Osteuropa-Aktien was created almost 30 years ago. We are now altering the investment strategy used in this well-established fund, making it more sustainable and adjusting its geographical scope.
Emerging Markets are becoming more and more interesting for sustainable investments
From a sustainability perspective, Emerging Markets have often been considered unattractive, but the tide is turning. In this interview, Jürgen Maier, fund manager of Raiffeisen-FelelősBefektetések-FeltörekvőPiacok-Részvény Alap, explains, among other things, how an Emerging Markets equity fund can be managed sustainably and which markets or sectors are particularly in focus.
Investing in Emerging Market bonds (now)?
Emerging Market bonds generally offer higher yields than bonds from developed industrialised countries, not least due to their above-average growth and the increasing global economic importance of many Emerging Markets. Nevertheless, the associated risks should not be ignored.
Promote the ESG improvement of the EM bond markets
The Emerging Markets present a number of major challenges for investors when it comes to sustainability and ESG-criteria. However, understanding and overcoming these challenges also opens up significant opportunities, both in terms of earnings and promoting a transition to sustainable business practices in the Emerging Markets.
Good valuations and improvements in ESG reporting
The Chinese equity market has priced in a number of negative aspects, according to Jürgen Maier, who is confident about the prospects for China as the leading market, as well as for India. Maier, fund manager of Raiffeisen-Nachhaltigkeit-EmergingMarkets-Aktien, cites several arguments and discusses the stringent sustainability requirements applied in the asset selection process and the progress in fulfilling ESG criteria. He currently finds certain topics very attractive.
Despite careful research, the statements contained herein are intended as non-binding information for our customers and are based on the knowledge of the staff responsible for preparing these materials as of the time of preparation. They are subject to change by Raiffeisen KAG at any time without further notice. Raiffeisen KAG assumes no liability whatsoever in relation to this document or verbal presentations based on such, in particular with regard to the timeliness or completeness of the information presented and the sources of information, or in respect of the accuracy of the forecasts presented herein.
The funds Raiffeisen-Nachhaltigkeit-EmergingMarkets-Aktien and Raiffeisen-Osteuropa-Aktien exhibit elevated volatility, meaning that unit prices can move significantly higher or lower in short periods of time, and it is not possible to rule out loss of capital.
The investment strategy of the fund Raiffeisen-Osteuropa-Aktien permits the fund to predominantly (relative to the associated risk) invest in derivatives.