Equity markets rebounded during the first quarter, reacting favorably to U.S Federal Reserve’s shift to more accommodative policies and improving confidence on the U.S.-China trade negotiations. Central banks turned dovish in response to tightening financial conditions and slowing global growth. China’s reaccelerated fiscal stimulus and progress on the trade talks alleviated concerns surrounding its economic slowdown. Emerging market equities reacted favorably, gaining 9.9% in U.S.
The fourth quarter was very difficult for global markets, as prices for most risk asset classes experienced elevated volatility. Investors in emerging markets were faced with shifting growth and risk dynamics due to several macro factors, including an unclear endgame for the U.S./China trade war, decelerating U.S.
The MSCI Emerging Markets Index declined 1.1% as tightening monetary conditions in the U.S., the strong U.S. dollar, political uncertainty, escalating trade tensions, rising inflationary worries, and fund outflows weighed on performance. The Perterra Emerging Markets Fund, L.P.