Investing in China, Brazil, India, Indonesia, Malaysia and Vietnam could be a way for investors to win against elevated inflation and recession.
For the first time in four decades, investors in the US and other rich economies are looking for a portfolio strategy that can win against elevated inflation and recession at the same time.k will take, but one thing seems certain: it will include some emerging-market assets.Stocks and bonds of poorer nations have sunk this year amid tightening by the US Federal Reserve and runaway consumer prices, and may sell off even more if the global economy stalls.
And the People’s Bank of China did just that on Monday as it unexpectedly lowered the rate on its one-year policy loans by 10 basis points to 2.75 per cent in the first reduction of a key rate since January. The seven-day reverse repo rate was cut to 2 per cent from 2.1 per cent. “China, a key driver of emerging markets, will be unique in pursuing a supportive policy amidst the tightening bias around the world.”Brazil is an oasis in Latin America, a continent where the overall mood is one of gloom over persistent inflation and growth constriction brought on by policy tightening. The nation’s consumer-price growth fell in July, responding to one of the most aggressive hiking cycles in emerging markets. That’s left Brazil with a real yield of 3.
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