FYI: This week, we sit down Lazard Asset Management’s James Donald, who serves as head of its Emerging Markets Equity team. He serves as managing director, portfolio manager/analyst. He joined Lazard in 1996, and has been instrumental in developing and coordinating its emerging-markets activities. Previously, he was a portfolio manager with Mercury Asset Management.
Donald explains how Emerging Markets have underperformed the US markets for the past years, mostly due to EM’s increased sensitivity to deflationary forces versus more developed nations. While they still have strong exposure to commodities, that sector now accounts for 15 percent of their economies. This is significantly lower than it was a decade ago. Negative real economic growth and/or crises are the clear enemies of emerging market equities.
Russia, Brazil and South Africa could be the most unappreciated parts of the emerging market universe. He is also intrigued by the fundamental changes taking place in India, and looks at Indian Subcontinent as having lots of potential; it is not inexpensive and has some issues to deal with, but has enormous potential.
Regards,
Ted
http://ritholtz.com/2018/03/mib-lazards-james-donald/Transcript:
http://ritholtz.com/2018/03/transcript-james-donald/M* Diversified Emerging Markets Fund Returns:
http://news.morningstar.com/fund-category-returns/diversified-emerging-mkts/$FOCA$EM.aspxM* Emerging Markets Bond Fund Returns:
http://news.morningstar.com/fund-category-returns/emerging-markets-bond/$FOCA$EB.aspx
