Excerpt from Barron’s quoting DataTrek co-founder Nick Colas:
…. “It’s not the only area, however. Though DataTrek’s Colas considers the emerging markets index a “reasonable way” to play on an end to the current trade war, he would rather be long U.S. technology stocks to benefit from some resolution of the trade conflict.
Here’s why: Though the MSCI Emerging Markets index offers more than 50% exposure to Greater China in terms of equity and currency, it’s levered to global growth through a 23% weighting to financials, and that financial exposure makes Colas wary. “Even if there is a trade deal, it is hard to see world-wide growth suddenly reaccelerating as it does after a recession. And that is the only time emerging markets really outperform”….
Read the full article here on Barron’s!