September saw Emerging Markets move slightly lower due to a rising US dollar, following expected interest rate hikes by the US Federal Reserve and US tax reform. The US dollar was up 0.72 per cent against the Russian ruble at press time, and the South African rand by 0.47 per cent, but down 0.64 per cent against the Brazilian real.
Nevertheless, the news remains broadly promising across the region, with China reportedly becoming adaptive to US market shifts and proactively drawing up scenarios which include interest rate hikes. China’s manufacturing activity data also pointed to the fastest growth in five years this September.
The upcoming inclusions of China Asia and Saudi Arabia to the MSCI Index provides increasing opportunity sets for active managers to generate positive returns and we remain overweight in the region.
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