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Reporte Goldman Sachs

Reporte Goldman Sachs

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Published by: Alfredo Jalife Rahme on Jan 27, 2014
Copyright:Attribution Non-commercial


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It’s only when the tide goes out that you learn who’s been swimming naked.”
Warren Buffett, 1992 Letter to Berkshire Hathaway Shareholders
Investment Management Division
Investment Strategy Group
December 2013
Emerging Markets: As the Tide Goes Out
Goldman Sachs
december 2013
This material represents the views of the Investment Strategy Group in the Investment Management Division of Goldman Sachs. It is not a product of Goldman Sachs Global Investment Research. The views and opinions expressed herein may differ from those expressed by other groups of Goldman Sachs.
Sharmin Mossavar-Rahmani
Chief Investment Officer Investment Strategy Group Goldman Sachs
Maziar Minovi
Managing DirectorInvestment Strategy GroupGoldman SachsAdditional Contributors from the Investment Strategy Group:
Jiming Ha
Managing Director
Matthew Weir
Managing Director
Gregory Mariasch
Vice President
Harm Zebregs
Vice President
Matheus Dibo
Investment Strategy Group
the recent swoon of emerging market assets
 has led many investors to question whether this period of underperformance reflects a temporary cyclical downturn or the beginning of a long-lasting trend based on the significant structural issues facing emerging market countries. We have called attention to the shared and specific fault lines of emerging markets for the last four years when making the case that US preeminence is intact and sustainable. We have repeated our belief that these
well-entrenched issues—covering the gamut from poverty and pollution to government interference and woefully inadequate infrastructure—were largely being dismissed in the rush to proclaim the rising power and influence of emerging market economies.So it should come as no surprise that we believe this recent bout of volatility and underperformance reflects a significant reassessment of emerging market countries and the lack of progress they have made in addressing their fault lines. If anything, the task before emerging market leaders is even more arduous than before the financial and economic crisis given that the macroeconomic tailwinds that boosted growth in the 2003–07 period have come to an end. Today, leaders in China cannot undertake needed reforms without running the risk of significant economic and social disruptions. Combined with the prospect of increased capital outflows brought on by a reversal of monetary policy in the United States, this catch-22 situation will increase uncertainty around all other emerging market assets.We therefore encourage investors across the globe to revisit their strategic asset allocation to emerging market assets and brace for the strong possibility of significant underperformance and heightened volatility over the next 5 to 10 years. While recognizing that some allocation to emerging market assets is warranted, we are lowering our allocation to emerging markets from a total of 9% to 6% for a moderate-risk client with a well-diversified portfolio. We also conclude that it is too early to overweight emerging market assets on a tactical basis, as they are not yet attractive enough from a valuation perspective.

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