China's Crisis is Good for Investors

China is still the most dominant of emerging markets; its growth is paramount to positive returns in the region and investors should be pleased with its progress

Emma Wall 10 April, 2014 | 16:24
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Investors have given up on emerging market equities. Volatility, currency weakness and economic uncertainty have led to investors taking money out of emerging markets for 22 consecutive weeks. The announcement last May that the US Federal Reserve would be tapering its quantitative easing policy, and the volatility which followed, was the final straw for many investors, but it has really been three years of bad news for emerging markets.

“Global money easing from Europe and the US flowed very easily into emerging markets when it began in 2008,” said Kathryn Langridge, manager of the Jupiter Global Emerging Markets fund.

“Stimulus created a number of distortions in the region; exchange rates went up, interest rates were kept unsustainably low and the veneer of success meant emerging market governments took their eye off the ball.”

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