Citigold is a wealth management service for clients with total deposits or investments with Citibank Thailand of 5 million baht or more. Citigold offers end-to-end premier banking solutions, including advisory and wealth management services, backed by a dedicated Relationship Manager and a team of experts trained by the Citi l Wharton Global Wealth Institute. Citigold also provides in-depth investment and economic insights to help investors make investment decisions. What’s more, Citigold customers enjoy an array of exclusive, curated lifestyle and banking privileges, one of which-the AB Emerging Markets Multi-Asset Portfolio mutual fund-is featured in this article.
What’s Happening in Emerging Markets “EM”
Growing risks to EM are making headlines. Turkey’s currency crisis, [ongoing] expectations of US interest rate hikes and a stronger US dollar are seen as big threats to EM. US–China trade tensions have also added to the anxiety, as a number of EM economies are very trade dependent. These fears or threats to EM have certainly cooled stock returns after two years of hot performance. But some of these concerns may be overstated, and the panic may be premature. The long-term risk profile of EM is continuing to improve. When viewed through a multi-year lens, we think macroeconomic and market fundamentals provide solid ground for EM companies to deliver results - and for investors to prosper. Today, EM economies are much more shock-resistant than they used to be, owing to improved trade balances and debt positions. What’s more, EM stocks are exposed to improving domestic macroeconomic conditions, strong secular growth drivers and broad sources of earnings. In the past, EM stocks have outperformed or underperformed developed-market stocks for relatively long multi-year cycles (Display). The last eight years of EM underperformance (which ended in 2016) were preceded by nearly nine years of outperformance.
Of course, historical performance trends don’t guarantee a repeat this time around. Yet, EM stocks trade at a 25% discount to their developed-market peers based on price/forward earnings. So even though the road ahead might not be smooth, we think there’s a solid foundation to expect a continued recovery for EM stocks over time. In addition, earnings growth in EM has continued and earnings revisions have broadly held up even in the face of continued trade war tension.
Battling EM Volatility By Increasing Opportunity Set
The increase in volatility this year is a reminder of the importance of managing risk in EM portfolios through challenging times. A flexible framework that dynamically integrates multiple asset classes can help to increase potential opportunity set and improve diversification given these uncertainties. AllianceBernstein also believes that by looking across asset classes, interesting opportunities can be found in different sectors and countries within EM.
After all, there is a world of diverse opportunities that exists in EM including 103 countries and greater than 9,000 issuers across equity and debt markets.
Multi-Asset Approach in Emerging Market Investing
Increases Potential Opportunity Set & Improve Diversification
For example, equity investors can focus on high-growth companies that are positioned to profit from domestically driven growth. Some of the most profitable and compelling secular growth technology companies in the world today are in China, where companies command an ever-growing share of spending by the rapidly growing middle class. Political reform is also helping to shape EM fixed-income markets. Take Latin America, where a crackdown on corruption is unfolding in countries like Brazil. After rampant spending and graft in the commodity-fueled boom years, today’s more business-friendly governments are advancing fiscally sustainable policies that favor growth. And with inflation becoming increasingly contained in some countries, many hard-currency bonds in the region look attractive.
Finally, managing both upside and downside within investor’s EM investing can make a big difference during turbulent times like this. It’s not just the level of returns that matters—it’s also managing the path of those returns that could allow investors to harness the longer term (secular) growth potential that EM may bring.
With over 40 years’ experience of building unconstrained multi-asset strategies, AllianceBernstein focusses its industry expertise on strategic emerging market investment. AllianceBernstein’s AB Emerging Markets Multi-Asset Portfolio mutual fund lets you invest in both emerging market equities and fixed income instruments while ensuring a diversified approach across multiple investment products, business sectors, and geographical spans.
Grow your investments through AB Emerging Markets Multi-Asset Portfolio, a mutual fund managed by world-class fund manager, AllianceBernstein. The fund is available only through Citigold and is exclusively offered in US Dollar currency in Thailand.
To speak with a Citigold relationship manager about these investment products, please call 02-081-0999 or visit https://citi.asia/THdcGmAP for more information.
Disclaimers and Index Definition:
(1) Investments contain certain risks; please study the prospectus and all relevant materials before investing. Investment products are not offered to US persons.
(2) Foreign Exchange Risk: Investors investing in investment products denominated in non-local currency should be aware of the risk of exchange rate fluctuations that may cause a loss of principal when foreign currency is converted back to the investors’ home currency. Exchange controls may be applicable from time to time to certain foreign currencies. Investors should therefore determine whether any foreign currency investment in suitable for them in the light of their personal investment objectives, financial means, and risk profile.
(3) MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, reviewed or produced by MSCI.
(4) AB Emerging Markets Multi-Asset Portfolio is part of AB SICAV I (referred to as “AB”). AB is an open-ended investment company with variable capital (société d’investissement à capital variable) under the laws of the Grand Duchy of Luxembourg.
(5) MSCI World Index: A market capitalization–weighted index that measures the performance of stock markets in 24 countries.
(6) MSCI Emerging Markets Index (EM): A free float-adjusted, market capitalisation-weighted index designed to measure equity market performance in the global emerging markets. It consists of 21 emerging-market country indices.
(7) J.P. Morgan Emerging Markets Bond Index Global (EMBIG) Diversified Index: an unmanaged index which tracks the total return of U.S.-dollar-denominated debt instruments issued by emerging market sovereign and quasi-sovereign entities: Brady Bonds, loans, Eurobonds, and local market instruments. The EMBIG Diversified limits the weights of those index countries with larger debt stocks by only including a specified portion of these countries’ eligible current face amounts of debt outstanding.
(8) J.P. Morgan Corporate Emerging Markets Bond Index (CEMBI) Broad Diversified Index: tracks US dollar-denominated emerging market corporate bonds, limiting the weights of countries with larger corporate debt stocks by including only a specified portion of those countries’ eligible current face amounts of debt outstanding.
(9) J.P. Morgan Government Bond Index-Emerging Markets (GBI-EM): tracks regularly traded, liquid, fixed-rate, domestic currency debt issues by emerging market governments.
(10) MSCI Singapore Index (SGD): The MSCI Singapore Index is designed to measure the performance of the large and mid cap segments of the Singapore market. With 25 constituents, the index covers approximately 85% of the free float-adjusted market capitalization of the Singapore equity universe.
(11) MSCI Hong Kong Index (HKD): The MSCI Hong Kong Index is designed to measure the performance of the large and mid cap segments of the Hong Kong market. With 47 constituents, the index covers approximately 85% of the free float-adjusted market capitalization of the Hong Kong equity universe.
