After concern over emerging markets’ economic stability in 2013, the industry has posted a few strong quarters.
And this year is significant for emerging markets since many are holding elections, says Nick Langley, investment director and senior portfolio manager of RARE Infrastructure in Sydney, Australia. He manages the Renaissance Global Infrastructure Fund.
“The key risks around elections are changes or shifts in public policy,” he says. “If public policy remains fairly stable, then [the country] is a good place to invest.”
Langley is expecting good returns from Brazil and India.
Brazil is holding an election later this year, but Langley has increased weightings in the country’s markets because he’s “pretty comfortable with where that’s headed.”
He includes India in his value strategies, and has been aggressively increasing holdings in the country since the beginning of 2014.
As for the rest of Asia, he says China’s economy is slowing. “[China is trying] to re-orient its economy away from being investment and export-led toward more domestic demand. And that is causing adjustments to a number of the supply chains through Southeast Asia.”
But it’s not all bad, Langley says. “You also have a lot of activity starting to pick up in Japan, which is having a positive effect along supply chains.”