What history tells us about today's EM crisis

Jeremy Thomas, manager of the Brunner investment trust, says history tells us the EM crisis is far from over, but managers should not stop searching for low entry points.

It is still unclear whether the emerging market turmoil seen over the past year will develop into another broad crisis like that of 1997 and 1998. In many respects, emerging world economies are more flexible than they were 15 years ago. But the normalisation of extraordinary monetary policy in the developed world, and the unbalanced nature and rapidly accumulated debt in China, are new risks. There are important lessons and reminders about markets worth considering at this point. Painful periodic crisis Firstly, it must be remembered that emerging markets suffer periodic crises,...