✶Explainer08:16
Why Market Accessibility Now Defines an Emerging Market
Emerging-market classification has shifted away from relying mainly on economic and political development. Index providers increasingly emphasize whether investors can move capital, obtain information, and participate without major restrictions.
- Classification criteria have changed over time
- MSCI emphasizes accessibility
- Capital mobility and information access matter
- Frontier markets have lower liquidity and more restrictions
“They've moved over time more towards what's easily accessible and M s c I is the biggest index provider in this area, and they're very…”
“They are much more rudimentary economies and rudimentary markets, um, and they have less liquidity in them.”
#market classification#msci#accessibility#frontier markets
✶Explainer11:56
Why Emerging Markets Move in Seven-to-Ten-Year Cycles
Donald links the prior decade of emerging-market underperformance to deflationary pressure and greater economic sensitivity. Emerging-market equities contain many industries whose fortunes depend heavily on global growth, making negative real growth and crises especially damaging.
- Leadership cycles often last seven to ten years
- Deflationary pressure hurt emerging markets
- Emerging markets are more economically sensitive than developed markets
- Negative real growth and crises are major threats
“I mean, they seem to be often seven to ten year periods that we see this.”
“I think the the clear enemies of emerging market equities are negative real economic growth and or crises.”
#market cycles#economic growth#deflation#risk
✶Explainer18:39
Why Political Risk Can Directly Reprice Emerging Markets
Political developments can affect emerging-market corporations, currencies, and investor protections more directly than political noise often affects US equities. South Africa and Russia illustrate how leadership changes, governance concerns, and state actions can alter an investment case.
- Political effects vary by situation
- Leadership changes can move currencies and markets
- Political action can materially affect corporations
- Governance risk is especially important in some countries
“certainly there are political effects that we see in emerging markets.”
“It certainly is a place where you have to take into account political risk because it can have big, big effects on certain corporations”
#political risk#governance#south africa#russia
✶Explainer26:29
Four Different Ways Lazard Approaches Emerging-Market Equities
Lazard organizes its emerging-market operation as a collection of specialized boutiques. Its equity menu includes quantitative, relative value, growth at a reasonable price, and core strategies designed to produce different portfolio exposures and return patterns.
- Lazard has twelve emerging-market teams across asset classes
- Four distinct equity strategies are offered
- Portfolio overlap is intentionally limited
- Investors can choose a style based on their objectives
“We have a quantitative one, we have a relative value one, which is where I spend most of my time. We have a growth at…”
“The overlap is relatively limited, and they will produce different types of results for investors over time.”
#investment styles#portfolio strategy#garp#quantitative
✶Explainer45:26
China's Shift from Maximum Growth to Better Growth
As China's catch-up advantage diminishes, the policy focus is shifting toward diversified, technology-led growth and lower leverage. Reform is complicated because state-owned enterprises retain privileged access to bank capital, sometimes at low rates, limiting ordinary credit discipline.
- Economic catch-up naturally slows as development advances
- China did not announce its customary target growth rate
- Better growth means diversification and modern industries
- State-owned enterprises retain privileged access to bank capital
“I think there's also a wish in China to have better quality of growth and not just simply higher growth.”
“state owned enterprises have actual rights to have the capital, often at lower rates”
#china#economic growth#state enterprises#leverage
✶Explainer50:16
Why Urbanization Remains Central to China's Development
China's urbanization policy is a decade-spanning effort to move people toward places with stronger education and employment opportunities. Infrastructure supports that migration while helping cities attract factories, investment, and globally competitive companies.
- Urbanization remains a primary long-term policy
- Economic and educational opportunities are greater in cities
- Infrastructure helps attract factories and employment
- Emerging economies need to plan development in decades
“Urbanization is still at the core of Chinese political thinking.”
“I think emerging countries have to think in terms of decades for their economic development.”
#china#urbanization#infrastructure#development