With hefty amounts of stimulus in Europe to deal with the pandemic, China’s economy beginning to recover, and a weaker dollar, foreign markets are becoming more attractive to U.S. investors. For those looking to dip their toes into emerging markets but not get caught in escalating U.S.-China tensions, one option is investing in European and Japanese companies that get a large share of their sales from emerging markets.
More broadly, developed market companies with hefty exposure to emerging markets have outperformed emerging markets, according to Ben Laidler, head of Tower Hudson Research.
In a recent interview, Baillie Gifford’s Jenny Davis noted that investors often “constantly overlook the phenomenally high-quality companies that are seen as European but the majority of their businesses are driven by emerging markets.” One such company is ASML Holdings , which is crucial to the making of semiconductors that power the digital economy.
Europe and Japan are not emerging markets. 🙄
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