Any time I’m asked to share an outlook for emerging markets, I have to preface my response by reiterating how important it is to remember that each country within the emerging space is unique. That means what we look for in one country may be completely different—and irrelevant—to what indicates opportunity in another. But one factor that makes emerging markets challenging moving further into 2017 is the lack of clarity in some U.S. policies.
With that in mind, two countries have been at the heart of recent conversations: Mexico and China. And, interestingly, they’re on my radar for different reasons.
Mexico is…a challenge. Between potential border tax issues and a slowing economy, we’re focused on finding companies with a proven acceleration of earnings and companies with largely domestic consumers. That second factor is no small feat, for reasons I speak to in the video below.
China piques my interest because its economy has beaten growth expectations—something we’ve been well-positioned to take advantage of for months. The government is invested in the economy, demonstrated by its willingness to incentivize investments and invest in infrastructure.
Looking past those specific examples, we’ll be watching for clarity on U.S. policy and keep an eye on the fundamentals of emerging countries as we head deeper into the second quarter, and beyond.
International investing involves special risks, such as political instability and currency fluctuations. Investing in emerging markets may accentuate these risks.
The opinions expressed are those of Patricia Ribeiro and are no guarantee of the future performance of any American Century Investments fund. This information is for educational purposes only and is not intended as investment advice.