The return of Macro. The second half of 2024 and particularly the fourth quarter ushered in a shift in narrative where macro issues seemed to dominate the headlines (and market moves) substantially more than earlier in the year when company specific fundamentals were the primary driver of returns. This shouldn’t have been too surprising given many major political elections globally and ongoing central bank monetary policy uncertainty, but the extent that macro issues were driving the train caught many off guard (including ourselves).
This month’s commentary examines contributors and detractors from Q4 performance, as well as recent portfolio shifts, in greater detail.
The new year brings the sense that many things will be different going forward for emerging markets. The new US presidential administration and its specific policies are likely to have a significant impact on the relative winners and losers within the asset class.