Quarterly Letter
Emerging market equities trailed developed markets in the second quarter; however, performance varied by individual markets and segments within EM (Chart 1). Regionally, North Asian countries’ mega cap technology stocks came under pressure from sweeping regulations changes, causing weak performance and offsetting strong performance in Latin America and EMEA. Frontier markets also outperformed. Across the capitalization spectrum, small and mid cap stocks demonstrated strength relative to large/mega cap stocks, outperforming both broad EM and developed markets benchmarks. EM currencies have reached new all-time highs, as exhibited by the MSCI EM Currency Index, with strong performances from the Brazilian real, South African rand, Hungarian forint, and Mexican peso.
