News · Publication
Principal Investor Perspectives examines the performance of financial assets amid (geo)political uncertainty and explores opportunities in emerging market debt
Despite lingering geopolitical uncertainty, global financial markets have staged a remarkable recovery in the last quarter. This edition of the Principal Investor Perspectives series looks at the links between politics, the economy and the performance of financial assets. It also considers tactical asset allocation in the current market environment and explores opportunities in the emerging market debt space.
Last quarter’s financial market performance showed that long-term market direction is set by the trend in underlying economic fundamentals rather than by (geo)political uncertainty. Nonetheless, increasing risks stemming from politics, particularly those related to growing fiscal deficits and rising public debt, do have an impact on markets – and not just in the US but also in many other industrialized nations.
The publication also takes a closer look at emerging and frontier market debt in local currency. In our economists' view, this asset class is currently attractive but undervalued and under-owned after years of neglect by global investors.
