Brexit creates a ‘rates over growth’ environment for EM – Goldman Sachs
|Research Team at Goldman Sachs, suggests that with global markets focused on Europe currently, EM may appear relatively better positioned to weather a drawdown.
Key Quotes
“However, EM equities have underperformed in almost every DM correction since 2010, and we expect EM to remain high-beta. While still highly fluid, Brexit likely represents a shock to global growth and a driver of further central bank accommodation – a reason to take duration risk relative to ‘growthy’ assets. As a reasonable comparison, during the 2011-12 Euro crisis, EM sovereign credit yielded a 19% total return while equity lost 15% (in USD).”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.