Emerging markets: Look past commodity exports to countries with strong domestic demand

Emerging markets investors often focus on commodity-intensive countries – many of which rely on China as one of the world’s top importers. But that may not be an attractive angle right now due to China’s weaker economy. That doesn’t mean there isn’t opportunity in the EM space, according to Pendal PM James Syme. He points to Latin America, where GDP growth and equity market returns are traditionally correlated with commodity prices – especially metals. The domestic economies of Brazil and Mexico should see significant interest rate cuts this year and next, further stimulating what is already quite robust domestic demand.

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