21 Aug IS TURKEY A REASON TO SELL EM?

The Turkish currency crisis is threatening an otherwise favorable EM outlook.
Emerging market (EM) equities have experienced significant selling pressure this
month amid the ongoing trade dispute between the U.S. and China and the crisis in
Turkey, which has sparked contagion fears and threatened to send the country into
recession. After last week’s 3.7% decline, the MSCI EM Index has lost 9.9% year
to date [Figure 1] on a total return basis and is 19.7% below its January 26, 2018,
record high. Meanwhile, the S&P 500 is just 0.8% below its record high on that
same date. So what should EM investors do now?

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