Firstly, the Indian market was a notable outperformer over the last quarter, supported by a favourable earnings outlook. Over the longer-term, we have increased confidence in Indian earnings growth.
Secondly, we believe China’s government remains committed to fostering innovation as an economic growth engine.
Finally, better than expected economic growth in Russia further buoyed its stock market.
“We find that there are widespread opportunities within emerging markets. The core competitiveness of emerging markets in sectors such as energy, in sectors such as materials, is now playing out as well.”
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What Are the Risks?
All investments involve risks, including the possible loss of principal. The value of investments can go down as well as up, and investors may not get back the full amount invested. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in emerging markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size and lesser liquidity. To the extent a strategy focuses on particular countries, regions, industries, sectors or types of investment from time to time, it may be subject to greater risks of adverse developments in such areas of focus than a strategy that invests in a wider variety of countries, regions, industries, sectors or investments. China may be subject to considerable degrees of economic, political and social instability. Investments in securities of Chinese issuers involve risks that are specific to China, including certain legal, regulatory, political and economic risks.