Emerging-market stocks are coming off a tough quarter after facing down a triple threat of rising Treasury yields, a stronger U.S. dollar, and a lackluster recovery in China’s economy and markets. But amid the pain, some see opportunity for a lasting rebound.
The iShares MSCI Emerging Markets ETF
which tracks the widely followed MSCI Emerging Markets Index, fell 4.1% during the quarter ended in September, outpacing a 3.7% decline for the S&P 500
the deeply liquid U.S. benchmark. Both benchmarks endured their worst performance in a year. It is just the latest chapter in what has been a decade of persistent underperformance during both good times and bad. The EM ETF fell 22.4% amid the global equity-market rout in 2022, compared with a 19.4% drop for the S&P 500, FactSet data show. But while the selloff in Chinese stocks has dominated headlines this year, some corners of the emerging markets universe have held up surprisingly well. Greek and Mexican stocks have even outperformed U.S. stocks in dollar terms, while other major markets like Brazil and India are trailing by only a modest margin. This hasn’t gone unnoticed by Wall Street, where some are advising clients to consider expanding their exposure to markets once deemed too risky for many U.S. investors saving for retirement. In a research note shared with MarketWatch, a team of equity strategists at Goldman Sachs Group
pointed out that eme …