Emerging markets have rallied strongly in 2016, but the outcome of the U.S. election has raised new concerns about whether the rally can continue. We see further upside potential given improvement in macroeconomic fundamentals, subdued inflation, reform momentum and stronger earnings. EM still appears reasonably priced, but we suggest investors be selective, particularly as valuations climb higher. We favor selective areas of opportunities in emerging Asia, namely India,
Indonesia and China.
A number of reasons drive our strategic preference for emerging Asian assets.