Investing
Why Merrill Lynch Is Now Raising Emerging Markets Over Developed Ones
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How long have you heard that the global economic uncertainty and currency levels were bad for emerging markets? And how long have you heard that the United States and developed markets were the best game of all markets? According to the Merrill Lynch RIC Report for May, the time to make a change is now. The firm now believes that the time has come to move back into emerging markets from developed markets, moving emerging markets to an Overweight allocation from a prior Underweight allocation.
The Merrill Lynch’s report indicates that the firm now is scaling back its allocation to developed markets. More specifically, it is cutting allocations to Japan and the United Kingdom.
The firm’s case for more emerging market exposure is based partly on the recent weakness in the U.S. dollar. Additional drivers are a firming up in commodity prices and signs that Chinese monetary policy is gaining some traction.
24/7 Wall St. decided to examine some of the key exchange traded funds (ETFs) for emerging and developed markets. Note that moving to an Overweight allocation would not be a considered an “all in” press, nor should it be considered a call to exit all developed markets in order to go all in at once in emerging markets.
Tuesday’s focus is on emerging markets as a whole, China, Brazil and the so-called state-owned enterprises (SOEs).
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