The $11 trillion EM rally has big backing for 2020

Emerging markets are about to embark on another year of wealth creation after adding $11 trillion to investor portfolios in the past decade.

Developing-nation assets will outperform their developed peers, with Asia having the best prospects, according to Bloomberg’s survey of 57 global investors, strategists and traders on their outlook for next year. Total wealth in emerging-market stocks and bonds now exceeds $25 trillion, bigger than the economies of the US and Germany combined.

The US-China trade dispute that dictated market moves throughout 2019 will remain the biggest driving force, while China’s growth outlook eclipsed Federal Reserve monetary policy to be the secondmost important factor. After a wave of global easing led to more than $11 trillion in negative-yielding debt, the haven pile will be less of a focus as some central banks enter holding patterns from easier monetary policies.


All emerging-market assets are making a comeback this year after posting their largest losses in three years in 2018 as the Fed led global central banks in cutting benchmark rates to support flagging growth. Russia’s ruble, the best-performing emerging currency so far this year, overtook the Brazilian real to become the top pick in 2020, while Indonesia was the most favored for both bonds and stocks.