Greetham: Why a QE exit is bad news for emerging markets

Fidelity's Trevor Greetham, who heads up the firm's tactical asset allocation team, has cautioned returns on emerging market equities will continue to disappoint as US monetary policy normalises.

A number of market commentators expect the Federal Reserve to put the brakes on QE by the end of the year, a move Greetham said will herald the start of a new paradigm. The manager (pictured) argued there will be a wide disparity across asset classes in terms of performance when QE is taken off the table. He has recently moved underweight emerging market equities across his multi-asset fund range, which includes the £700m Fidelity Multi Asset Strategic fund, as he expects the recent underperformance of these stocks will continue. Over the past three years, the average fund in the I...