Market Extra: Why Mark Mobius thinks U.S. stocks haven’t bottomed — and where he sees emerging-market opportunities

by | Aug 3, 2022 | Stock Market

U.S. markets have provided plenty of excitement this year to keep investors on their toes. But as badly as U.S. and European stocks have performed since the start of the 2022, emerging-market equities have done worse. But as the U.S. dollar as retreated from its multi-decade highs over the past month, investors, including Allianz’s Mohammad El-Erian have pointed out that valuations in emerging markets have reached “historically cheap” levels.

Asked about his outlook for emerging- markets, Mark Mobius, a pioneering investor who helped to build Franklin Templeton’s emerging markets business before launching Mobius Capital Partners, argued that while the overall tone has been “generally negative” this year, there are still plenty of opportunities to be found in the emerging-markets space. ‘We are finding good companies in all regions’ To be sure, the underperformance of EM stocks is nothing new. The MSCI Emerging-Market Index
a gauge that includes shares of companies from more than 20 of the world’s biggest markets in Asia, Latin America and Africa, is down 18.4% compared with the S&P 500’s 13.4%
year-to-date. Over the last 10 years, MSCI’s EM index has returned just 36.9% in U.S. dollar terms, while the S&P 500 has returned 264.5%, according to FactSet data. Within the index, performance has varied widely, and past performance doesn’t dictate future returns. When asked about his outlook for each region, Mobiu …

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