Top of the Morning: Are emerging markets becoming less volatile than developed markets?
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For decades, emerging markets have been seen as the riskier part of portfolios. We discuss what has changed, and why markets are suddenly challenging that assumption now. Plus, we highlight how investors should consider using emerging market equities, bonds, and currencies in por
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4 itemsTop of the Morning: Are emerging markets becoming less volatile than developed markets?
The desk's thesis focuses on the shifting perception of emerging markets (EM) regarding volatility, suggesting that these markets are becoming less risky compared to developed markets (DM). Per the full note [source], emerging market assets have surprisingly outperformed their developed counterparts in 2023 even amid escalating geopolitical tensions, defying long-held investment assumptions. This evolving narrative is bolstered by the performance metrics that indicate positive total returns for emerging market assets since the onset of the conflict in the Middle East. With increasing investor interest in EM equities, bonds, and currencies, market expectations may need to recalibrate as volatility readings are increasingly signaling stability in these regions.