The MSCI Emerging Markets Index has followed global stocks lower this year, losing nearly a fifth of its value year to date YTD. After underperforming against world indices in three of the previous four years, emerging market EM equities were positioned for a recovery at the start of 2022. At the time, hope stemmed from distressed market valuations and rising Covid-19 vaccine inoculation rates.
But a late winter omicron variant dampened risk appetite for most equities. The outbreak amplified Beijing’s strict zero-Covid-19 restrictions, grappling already tight supply chains. In addition to city-wide lockdowns across China, the Russia-Ukraine conflict and a hawkish Federal Reserve shifted capital away from EM and...
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