Has the outlook changed for emerging markets?

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Is it a good time for investors to raise their exposure to emerging markets? As we entered 2022, many would never have imagined the tragic events that would unfold. Russia’s invasion of Ukraine has unsurprisingly rocked markets on a global scale, as Western leaders have imposed heavy economic sanctions on Russia.

The MSCI Emerging Markets Index sold off sharply after the invasion, and while the bourse has since recovered some earlier losses, it remains down 5 percent since the start of the year.

While those markets closely linked to Russia or Ukraine have sold off the most, we have seen widespread falls across stocks in emerging nations, regardless of fundamentals. —AN