Is Turkey A Reason to Sell EM?
The Turkish currency crisis is threatening an otherwise favorable EM outlook. Emerging market (EM) equities have experienced significant selling pressure this month amid the ongoing trade dispute between the U.S. and China and the crisis in Turkey, which has sparked contagion fears and threatened to send the country into recession. After last week’s 3.7% decline, the MSCI EM Index has lost 9.9% year to date [Figure 1] on a total return basis and is 19.7% below its January 26, 2018, record high. Meanwhile, the S&P 500 is just 0.8% below its record high on that same date. So what should EM investors do now?
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