Source: Bloomberg
Author: SELCUK Gokoluk
Morgan Stanley Investment Management Company said that the stock trend of emerging markets will become the current ten -year winner.The company has become the latest investors who are liable to other regions.
Jitania Kandhari, deputy chief investment officer of the company and the director of macroeconomic research, said that it is evacuating the US stock market to increase risk exposure to the development of the market.She said that the stock valuation of the market is attractive, and the growth of economies such as India is bound to better than the United States.
"A new leader will appear every ten years in the market. In the 2010s, it was US and large technology stocks," Kandhari said in a telephone interview. "Emerging markets and international stocks can obviously become the leaders of the current age."The company's asset management scale is $ 1.3 trillion.
Emerging market stocks have a strong start this year. The MSCI emerging market index rose 8.6%, while the US benchmark stock index rose 4.7%.At the time of emerging markets, China has withdrawn from the crown disease zero policy to boost the economic prospects, and investors are preparing to meet the end of the central bank's radical interest rate hike.Many people still believe that US stocks are expensive, and the discount rate of emerging market stocks is close to 30%.
Kandhari said that the decline in the share of the United States in the global economy is getting more and more serious.She said that the configuration of the fund for emerging markets is much lower than the historical average and the cheap currency, which provides a lot of room for emerging markets to win.
"The real motivation of the asset category is the difference in growth, and the differences between emerging markets compared to the growth of the United States are improving," she said.
Growth Forecast
According to Bloomberg's estimation, the average growth rate of emerging economies in 2023 is expected to be 4.1%, 4.4%in 2024, and the expected growth rate of double doubles than the United States.The United States is expected to increase by 0.5%in 2023 and 1.2%in 2024.
As investors and strategists avoid US stocks and start to be optimistic about stocks in other regions, the remarks of Morgan Stanley Investment Management Company highlight that this market theme is becoming increasingly popular.In the report, the Bank of America quoted EPFR Global data that as of the week of January 18, the development of market bonds and stock funds had inflow of US $ 12.7 billion, a record high, and US stock funds flowed out of $ 5.8 billion.
Asset allocation
Kandhari recommends not to configure according to the weight of the benchmark index, especially when involving the Chinese market, the emerging market must also be carefully selected.
"China is an important part of the index, accounting for 30%, but we believe that as the index increases, its proportion will not be greater," she said that the reason isChallenges such as chain migration."You really have to take the initiative to invest in other countries with good prospects. Don't configure according to the benchmark weight."
On the other hand, India is the favorite of its fund and one of its largest markets.
"All factors that are not good for China are good for India," Kandhari said.The Indian population is growing and debt is lower than China, and China is in "the eye to go global". This storm is promoting the relocation of the supply chain, which is conducive to other emerging markets such as Indonesia, Thailand, Vietnam and Mexico.
