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Audio Commentary

Emerging Markets Reach Fork in the Road

After an exciting rally for emerging markets, especially local currency bonds, Portfolio Manager Michael Arno and Senior Vice President – Investment Specialist Katie Klingensmith review the drivers behind performance and assess whether the momentum could continue. In this podcast, they discuss:

  • How dependent are emerging markets on the U.S. growth story? Similarly, how much of the regional underperformance of Asian emerging markets relates to China?
  • What factors have set Latin America apart and what is the outlook for that region in terms of opportunities and risks?
  • On a relative, multi-sector basis, where do they see opportunities among emerging market corporate credit and currencies?

Given the aggressive approach of many Latin American central banks—and signs of success against inflation—the conversation concludes with a country-by-country review of the region. Disinflation in Latin America may be about halfway through, and the rates story may not be as compelling as it was last year. However, it is still an attractive place to allocate capital, in our view.

Press play below to listen to the full commentary.

Groupthink is bad, especially at investment management firms. Brandywine Global therefore takes special care to ensure our corporate culture and investment processes support the articulation of diverse viewpoints. This blog is no different. The opinions expressed by our bloggers may sometimes challenge active positioning within one or more of our strategies. Each blogger represents one market view amongst many expressed at Brandywine Global. Although individual opinions will differ, our investment process and macro outlook will remain driven by a team approach.