Investing in Emerging Markets

In a bear market, there are more likely to be clear-cut winners and losers, and investors need to have additional control over their investments. Trive’s unique multi-asset platform enables individuals to invest actively in alternative securities in emerging markets. 

Precise information about each distinct emerging market is also crucial. Trive, with its strong global presence and expansion plans, is well-positioned to provide investors with regionally tailored investment tools. A one-size-fits-all emerging market investment strategy won’t cut it.

The explosion in retail inflows, made simple by easy-to-use ETFs and mutual funds, has been one of the biggest trends in emerging markets over the last five years. As a result of the acceleration of this trend during the pandemic, retail investors’ share of total equities trading volume now sits, according to BNY Mellon, at 25%.

In the past, especially between 2001 and the 2008 financial crash, exposure to emerging markets consistently offered double-digit returns for institutional and retail investors. Today, however, the investment case for emerging markets is considerably more complex. 

So, what are the critical risks for prospective investors?
-Global liquidity is tightening due to the inflationary pressure caused by geopolitical disruption, China’s zero-Covid policy, the economic slowdown, and the unprecedented level of government pending during the pandemic. 

The record-breaking strength of the US dollar in recent months means that borrowing costs for developing economies, whose governments borrow in foreign currencies, typically in USD, have also become considerably more expensive. This has hurt the price of developing countries’ government and corporate bonds, raising fears of insolvency.

The primary high-growth case for investing in emerging markets is therefore being challenged. Yet, savvy investors can still use the opportunities in today’s emerging markets with the right tools.

Disclaimer: Trive South Africa (Pty) Ltd, Registration number 2005/011130/07, and an Authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act 2002 (FSP No. 27231). Any analysis/data/opinion contained herein are for informational purposes only and should not be considered advice or a recommendation to invest in any security. The content herein was created using proprietary strategies based on parameters that may include price, time, economic events, liquidity, risk, and macro and cyclical analysis. Securities involve a degree of risk and are volatile instruments. Market and economic conditions are subject to sudden change which may have a material impact on the outcome of financial instruments and may not be suitable for all investors. When trading or investing in securities or alternative products, the value of the product can increase or decrease meaning your investment can increase or decrease in value. Past performance is not an indication of future performance. Trive South Africa (Pty) Ltd, and its employees assume no liability for any loss or damage (direct, indirect, consequential, or inconsequential) that may be suffered from using or relying on the information contained herein.  Please consider the risks involved before you trade or invest.