Geopolitics are often an important consideration when investing in emerging market (EM) stocks, the upcoming U.S. election included. But regardless of who takes the White House in November, the next administration is likely to continue down a path of deglobalization, with important considerations for EM investors, says Emerging Market Equity Portfolio Manager Daniel Graña.

    Key takeaways

  • Regardless of the U.S. election outcome, either presidential candidate would likely continue down a path of trade reform and deglobalization.
  • Against this backdrop, a rising tide will not lift all boats in emerging markets. To succeed, we believe companies must adapt supply chains and governments must focus on policy reform and investing in competitive intellectual property.
  • To the extent the election improves the economic outlook for the U.S., that could be a positive for emerging markets. However, the benefit would be tempered if higher taxes, stringent regulation and surging national debt hinder growth.