Why EM investors should steer clear of Turkey

ON EMS

Investors looking to buy emerging markets on the dip would be wise to avoid some markets altogether, said Carmignac Gestion's Sandra Crowl.

Emerging market equity valuations are now back to 2005 levels on a price-to-book basis. The de-rating of these equities accelerated over the summer, with investors preferring European stock markets despite Europe’s much lower levels of economic activity. Despite these opportunities, investors should remain wary. More than $25bn has left emerging economy stock markets over the last three months. Because of this, investing in liquid stocks will become even more important in future. Volatility will be exacerbated by lower liquidity and outflows due to the potential tapering of quantitati...