So far, 2014 has not been a good year for Russia’s equity markets. While the valutation case can certainly be made, geopolitical risk is high, and it’s not easy to transition from looking at the fundamentals of companies to understanding the sanctions that different government actors might apply to selected Russian firms.
As one of the largest economies and markets in the world, when China catches a so-called “economic cold,” the impact reverberates throughout the global economy. Since May 7, 2014, China’s equities have rallied strongly, buoyed by improving economic data.
In 2013, equity markets in Europe, Japan and the United States delivered strongly. Emerging markets, on the other hand, were disappointing. However, it is at precisely these times—after being disappointed—when emerging market equities probably warrant a closer look.
Today, some of the most widely followed exchange-traded funds (ETFs) that focus on dividend growth employ backward-looking growth screens that require a company to have paid—and in some cases raised—dividends for 5, 10 or even 20 years before becoming eligible for inclusion.
WisdomTree has been excited about Abenomics since its genesis in November of 2012. We believe that markets have responded well to the progress made on the first two arrows—namely decisive monetary policy and increases in fiscal spending.