Putting the EM sell-off in perspective

The sell-off that knocked emerging markets last year threatened to take a dangerous turn in early 2014, as Argentina’s decision to devalue the peso in January triggered further sharp declines in markets across the developing world. Yet, while a reassessment of emerging market dynamics was due, the seeds of this correction were sown some time ago. This carries significant investment implications. Stage one of the reality check occurred in 2010, when deterioration in the growth trajectory of developing economies took root. Global economic activity had peaked and China’s growth started t...