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Please be advised that future verbal and written communications from the bank may be in English only. These communications may include, but are not limited to, account agreements, statements and disclosures, changes in terms or fees; or any servicing of your account.

Por favor, tenga en cuenta que es posible que las comunicaciones futuras del banco, ya sean verbales o escritas, sean únicamente en inglés. Estas comunicaciones podrían incluir, entre otras, contratos de cuentas, estados de cuenta y divulgaciones, así como cambios en términos o cargos o cualquier tipo de servicio para su cuenta.

Informamos que as futuras comunicações do banco, verbais e escritas, podem estar disponíveis apenas em inglês. Essas comunicações podem incluir, entre outras, acordos de conta, extratos de conta e divulgações, alterações aos termos ou tarifas, ou qualquer tipo de serviço pertinente à sua conta.

仅此通知,本行即日起发出的口头及书面通信可能将只提供英文版本。这些通信可能包括但不限于账户协议,账单和通知,条款或费用变更;或任何为您账户提供的服务。

Please be advised that future verbal and written communications from the bank may be in English only. These communications may include, but are not limited to, account agreements, statements and disclosures, changes in terms or fees; or any servicing of your account.

Por favor, tenga en cuenta que es posible que las comunicaciones futuras del banco, ya sean verbales o escritas, sean únicamente en inglés. Estas comunicaciones podrían incluir, entre otras, contratos de cuentas, estados de cuenta y divulgaciones, así como cambios en términos o cargos o cualquier tipo de servicio para su cuenta.

Informamos que as futuras comunicações do banco, verbais e escritas, podem estar disponíveis apenas em inglês. Essas comunicações podem incluir, entre outras, acordos de conta, extratos de conta e divulgações, alterações aos termos ou tarifas, ou qualquer tipo de serviço pertinente à sua conta.

仅此通知,本行即日起发出的口头及书面通信可能将只提供英文版本。这些通信可能包括但不限于账户协议,账单和通知,条款或费用变更;或任何为您账户提供的服务。

Emerging risks and opportunities

Perspectives

Emerging risks and opportunities

Author

By Parul Gupta, Global Head of Strategic Asset Allocation

February 2, 2016Posted InEquities, Investment Strategy and Investments

Today’s turmoil may create tomorrow’s opportunity. That’s a key message of ‘Navigating emerging markets’, one of our investment themes for 2016. Emerging markets (EM) have been in turmoil for some time now, with the MSCI Emerging Market Index dropping by as much as 36% in the last twelve months alone.

This has left EM equities looking lowly valued. Low valuations have generally tended to be followed by high returns, and high valuations by low returns. So, what might the future hold for EM equities?

Our own strategic asset allocation methodology estimates that EM equities could potentially return an annualized 10.4% over the coming decade. That’s well ahead of its estimate of 6% for developed market equities and also above the 7.3% EM equities returned over the last decade.

Of course, this doesn’t necessarily tell us anything about the near-term outlook. As our Global Chief Investment Strategist Steven Wieting points out, our long-term return estimate of 10.4% could easily rise further if EM equities suffer further deep falls in the next couple of years.

With the risk of further near-term falls, how might investors position themselves? Our Global Investment Committee (GIC) – which makes asset class recommendations based on the next 12 to 18 months’ outlook – has been tactically underweight EM equities in Latin America and Emerging Europe, but more positive on certain emerging regions and countries, especially in Asia.

You can read Navigating emerging markets in full here. And our latest long-term return estimates across various asset classes will appear here soon.

There may be additional risk associated with international investing, including foreign, economic, political, monetary and/or legal factors, changing currency exchange rates, foreign taxes, and differences in financial and accounting standards. These risks may be magnified in emerging markets. International investing may not be for everyone.