Since infusing some $11 trillion to shareholder portfolios over the past decade, emerging markets are about to venture into another explosive year of making cash.
According to Bloomberg's survey of 57 global investors, strategists and traders on their outlook for 2020, developing-nation capital would outperform their established peers, with Asia having the most solid prospects.
Total wealth now exceeds $25 trillion in emerging-market stocks and bonds, larger than the combined US and Germany economies.
The trade animosity between the Chinese and the Americans which dominated market movements this year will remain the primary driving force, although China's growth outlook eclipsed Federal Reserve monetary policy estimates as the second most important variable.
Bullish On Emerging Markets
After a series of financial bailouts set the stage for more than $11 trillion in negative-yielding bonds, the haven pile will be less of a focus as some central banks initiate holding patterns from conventional financial measures.
All emerging-market assets - currencies, stocks and bonds - have made a rebound in the last quarters after reporting their biggest losses last year as the Federal Reserve led global central banks to cut benchmark rates to help cushion inflation.
Russia's ruble, the best-performing emerging currency so far this year, has surpassed the Brazilian currency to become the top pick in 2020, while Indonesia has been the most preferred both for bonds and stocks.
"I'm still pretty bullish on emerging markets going into 2020," said Takeshi Yokouchi, a senior fund manager at Sumitomo Mitsui Asset Management Co. in Tokyo, managing $160 billion in assets.
According to Yokouchi, "there are still underlying supporting factors for the emerging markets, with very low global levels, which will allow investors to look at higher-yielding capital."
Asia: Where The Money Is
Based on data compiled by Bloomberg, the combined equity value of 26 countries listed by MSCI Inc. as "rising economies" has increased by $6.6 trillion since the end of 2009.
Meanwhile, Bloomberg Barclays bond indices covering a broader swath of emerging, economies show local currency bonds adding $2.9 trillion, U.S. dollar bonds infusing $1.7 trillion, and euro-denominated securities allotting $237 trillion. MSCI Inc.'s stock index so far this a year has risen by 9.6 percent and its currency gauge is up 1.4 percent.
Asia retained its top currency and stock spot, while Latin America, threatened this year by a rise in political unrest, overtook Asian bonds.
Meanwhile, the least preferred for bonds was the Middle East and Africa, despite pushing one notch up for currencies. High-yielding resources dominated the region-wide top spots, reflecting continued competition.
