A bit in the technical weeds, but worth reading as they discuss the results of applying this methodology to several EMs.
- The CAPE methodology is well suited for volatile and cyclical markets such as those we find in Emerging Markets. Countries in the EM asset class are prone to boom-to-bust economic cycles which are accompanied by large liquidity inflows and outflows that have significant impact on asset prices. These cycles often lead to periods of extreme valuations both on the expensive and cheap side. The Cyclically Adjusted Price Earnings multiple (CAPE) has proven effective in highlighting them.
- We map index returns and CAPE ratios for the U.S., GEM (Global Emerging Markets) and the most important emerging market countries (China, India, Taiwan, Korea and Brazil) and also for several countries of interest (Turkey, Philippines and Mexico).
Source: Using CAPE Ratios in Emerging Markets (The Emerging Markets Investor)
Similar Posts:
- Outlook on Emerging Markets (Lazard AM)
- Frontier Markets (Meketa Investment Group)
- Emerging Market Links + The Week Ahead (January 23, 2023)
- Emerging Market Fixed Income: Characteristics of the Asset Class (FTSE Russell)
- Guide to Emerging Markets Investing (Robeco)
- Emerging Markets Back in Favour Among European Investors (Citywire)
- The New Emerging Markets Landscape: Policy Improvements Should Contribute to Increased Resilience (Franklin Templeton)
- Aberdeen CEO: Stick With the Emerging Markets (CNBC)
- Changing Investor Attitudes About Emerging Markets (CNBC)
- Ten Tips for Understanding Emerging Markets Right Now (BloombergView)
- The World in 2050 (PWC)
- How Will Emerging Market Debt Emerge From the Crisis? (Capital Group)
- Are There Greater Opportunities In Asia’s Frontier Markets Than in China? (FT)
- Emerging Market Resilience (Franklin Templeton Investments)
- Four Reasons Why We Think Emerging-Market Fears Are Overblown (Franklin Templeton)
