From the desk of Willie Delwiche.
Key Takeaways:
- China weakness has meant moving away from EEM for Emerging Market Exposure
- New highs from Taiwan could point to improving trends for China and EEM
- Canada benefitting from exposure to Energy & Financials
Emerging markets have been dealing with the opposite problem that we have discussed in the US. In the US, mega-cap strength has supported the indexes as conditions beneath the surface struggled. In Emerging Markets, mega-cap weakness (China accounts for nearly 22% of EEM) has weighed on the indexes as conditions beneath the surface improved. The goal of this piece is to help discuss how we will know if and when that condition changes.
Given the struggle at the top of the index, we have been utilizing India, Russia, and Saudi Arabia (which together account for 19% of EEM) for Emerging Market exposure. All three of these (as well as FM, Frontier Markets) have made frequent appearances on our new high lists.
