By a News Reporter-Staff News Editor at Economics Week -- Fidelity Investments® has released a four-part podcast series discussing the current state of emerging markets. Titled Making Sense of the Turmoil in Emerging Markets, the new podcast series provides in-depth analysis of the factors driving emerging markets volatility from equity, currency, asset allocation/macro, and sovereign debt perspectives. The series is hosted by Institutional Portfolio Manager Brian Drainville. Part One: Equities -- Bob von Rekowsky, emerging markets strategist, discusses why the U.S. Federal Reserve's monetary policy tapering is creating turbulence in emerging market equity markets. He also reveals why emerging market equity opportunities in cyclically driven sectors may prove more rewarding than investing in stocks that outperformed in previous emerging market cycles. Part Two: Currencies -- Constantin Petrov, emerging markets currency analyst, discusses why anticipated changes in U.S. monetary policy are leading to significant depreciation of many emerging market currencies. He also details how emerging market central banks are starting to take the appropriate policy measures to defend their currencies, even if the measures slow economic growth. Part Three: Asset Allocation and Macro -- Dirk Hofschire, senior vice president of Asset Allocation Research, discusses why, from a macroeconomic standpoint, the cyclical outlook for emerging market economies is likely to remain challenging in the near term. He also points out how the recent turbulence could open up some allocation opportunities within emerging market equity and debt. Part Four: Sovereign Debt -- Eric Lindenbaum, emerging markets sovereign debt analyst, discusses why the tapering of quantitative easing by the U.S. Federal Reserve negatively affected EM hard currency sovereign debt.
To download each of the four podcasts, please visit Fidelity.com/viewpoints/investing-ideas/emerging-markets-update.
Fidelity also has published its February Business Cycle Update. The new paper analyzes emerging markets, noting that these economies face an array of late-cycle challenges, but increasing country divergences, falling correlations, and valuation disparities suggest selective opportunities within emerging market equity and debt.
Investment decisions should be based on an individual's own goals, time horizon, and tolerance for risk.
Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.
Stock markets, especially foreign markets, are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. Foreign securities are subject to interest-rate, currency-exchange-rate, economic, and political risks, all of which are magnified in emerging markets. These risks are particularly significant for funds that focus on a single country or region.
The information presented above reflects the opinions of the speakers as of February 4, 2014. These opinions do not necessarily represent the views of Fidelity or any other person in the Fidelity organization and are subject to change at any time based on market or other conditions. Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
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Keywords for this news article include: Economics, Federal Reserve, Monetary Policy, Fidelity Investments, Finance and Investment, Investment and Finance.
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