Time to invest in emerging markets?

Equities are looking up in Brazil, Russia and Turkey

 by Bryan Borzykowski for Moneysense

There may have been no worse place to invest over the last few years than in emerging markets. Between 2011 and 2015, the MSCI Emerging Market Index was down about 32%—our own troubled market only fell by about 3.2% over that same time period. But if there’s one thing to know about developing nations, it’s that things can go from bad to good seemingly overnight. Since Jan. 21, when global markets began to rise after their post New Years correction, the index is up 31%.

There are plenty of reasons why the region struggled, including slowing growth in China (the country saw its GDP fall from about 11% in 2010 to around 7.7% in 2015), falling commodity prices and political instability, which caused investors to buy more American stocks and less emerging market ones.

Attitudes are shifting, says Gerardo Zamorano a director at Brandes Investment Partners, which specializes in emerging markets. Oil prices have climbed by about 31% this year, fears over rising interest rates in the U.S.—another big reason as to why this area suffered—have lessened and people are once again looking for ways to boost middling returns. Many of these nations, such as Russia and Brazil, have also become incredibly cheap. Compared to their historical averages, some markets are trading at a 30% discount, says Zamorano.

Visit Moneysense.ca to read the rest of the article.