Emerging Markets Shrug Off Rate Hike Rumors

The video discusses the sensitivity of emerging market (EM) assets to Federal Reserve policy changes, highlighting that EM assets are less affected than often believed. Historical data shows EM assets perform well during periods of interest rate hikes, supported by superior growth prospects compared to developed markets. The video also covers the role of carry trades and interest rates, suggesting that EM assets remain attractive despite potential rate increases. Global asset allocation to EM markets is below neutral, indicating potential for increased investment. The impact of trade policies, particularly tariffs, is also considered, with a focus on recent developments and their implications for EM assets.

In what ways do global asset allocation trends affect investments in emerging markets?

What concerns do investors have regarding the potential trade spat and its impact on EM assets?