Summary

Jonathan discussed whether Emerging markets are back, assuming they had declined at some point. EM dollar debt investments have consistently outperformed, proving EM never disappeared for this asset class. Local currency investments in EM have generally done well compared to developed markets. EM equities experienced significant outperformance until 2007 but have struggled since, partly due to the exceptional performance of the US equity market and the unpredictable behavior of China's market. The current environment shows an export recession, making it unfavorable for EM equities and currencies. Investment themes focus on domestic strength, export outperformance potential, and exposure to China services and consumer reopening in the equity market. In the local currency space, stable monetary conditions and high interest rates are sought after. Dollar debt investments are considered countercyclical opportunities amid weak equity and local currency prospects. The overall outlook suggests EM is not fully back yet, and the current environment offers limited opportunities in local currency assets. Jonathan remains interested in dollar debt and dollar credit investments. The unique behavior of China's equity market and the exceptional performance of the US market significantly impact overall EM performance.

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