Outlook on Emerging Markets in 2024

Outlook — Lazard Asset Management

January 08, 2024

Lazard's Outlook series provides a forward-looking view, over the short, medium, and/or long term, of asset classes, sectors, regions, or countries from the view of Lazard Asset Management. In this edition, LAM portfolio managers share their outlook for Emerging Markets in 2024.

Summary

  • We believe emerging markets (EM) equities are becoming ever more attractive as it remains one of the most mispriced asset classes globally with valuation discounts relative to developed markets and U.S. equities hovering near 30% and 40%, respectively.

  • While many parts of EM equity remain markedly under-owned despite their low cost, we expect earnings growth to be higher in EM in 2024 compared to the developed world, driven to great extent by emerging Asia and information technology companies.

  • Because fixed income markets historically tend to generate equity-like returns during the period between the end of central bank rate hikes and the completion of rate cuts, we remain constructive on EM debt amid a backdrop of ongoing monetary cycle easing.

  • Considering the dispersion in monetary and fiscal policies, we believe ample opportunities for alpha generation in EM debt fill this election-heavy year.

Click here to read our Outlook on Emerging Markets in 2024.

 

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