Adam Kutas – Beyond emerging markets
As the portfolio manager for Fidelity Frontier Emerging Markets Fund, Adam Kutas frequently travels to distant locales in search of new investment opportunities. A core part of the Fidelity investment process is “kicking the tires” on companies by visiting management in their home countries and seeing the operations first-hand. As well, with emerging and frontier markets, having a deep understanding of a particular country’s economic and political environment is essential to fully comprehending the risk and rewards. This blog is intended to highlight this research process and help investors and advisors better understand the opportunities provided by exposure to frontier markets.
A Visit to Emerging & Frontier Europe: the “Originals” are back
After 10 years of economic headwinds, Eastern European countries are leading emerging markets in GDP growth. Should investors take a closer review of these ‘original’ emerging markets? Portfolio Manager Adam Kutas studies the latest economic developments in Eastern Europe, including the secular ‘tailwinds’ that could drive future growth in the area.
Trade wars, belts, roads and all in between
China’s ‘Belt and Road Initiative’ (BRI) is impacting both frontier and emerging markets, but it is multi-faceted and complex. What do global investors need to understand? Portfolio Manager Adam Kutas takes a closer look at the historical context of ‘BRI’ and the frontier markets being impacted.
Frontier comes in from the cold
Iceland will soon be reclassified as a frontier market. How should investors react? Adam highlights the positive portfolio diversification benefits Iceland may provide and how it compares to other Baltic-country opportunities.
Any “frontier” left in frontier markets?
Adam argues that the recent upgrading of several countries from “frontier” to “emerging” is positive for frontier investors as it creates a more purely “frontier” index – and as a result, investors will have more exposure to the assets they seek.
Trade wars and collateral benefits
Adam discusses the “collateral benefits” of the trade war between the U.S. and China and how frontier markets should capture the lion’s share of the benefits.
Saudi Arabia and pending MSCI EM inclusion: the usual fade?
Adam discusses the pending inclusion of Saudi Arabia into the MSCI EM index.
China’s “gifts” to frontier
Adam discusses China’s “gifts” to frontier markets: communication, power and electric vehicles.
Adam gives his outlook for frontier emerging markets for 2019.
The three leapfrogs in frontier
Adam explains the concept of “leapfrogging”, which is how frontier countries "leapfrog" market structures that exist in developed markets and move straight to the most modern systems. It is most apparent in three sectors: telecom, banking and power.
Why Frontier Emerging, not just Frontier?
Adam explains why the index for the Fidelity Frontier Emerging Markets Fund is the MSCI Frontier Emerging Markets (FEM) Index and not the MSCI Frontier Markets (FM) Index.
Middle East - A timely rise in the index
Adam talks about how the emerging (EM) and frontier (FM) markets are becoming more important from an index perspective as the region is rising sharply in both the EM equity and bond indices. He discusses whether this will have an impact on stock performance.