* Global Assets in 2017 http://reut.rs/2ne9sjH
* World FX rates in 2017 http://tmsnrt.rs/2egbfVh
* EM stocks in 2017 http://tmsnrt.rs/2hn5N02
* EM currencies in 2017 http://tmsnrt.rs/2hniYya
* EM bonds http://tmsnrt.rs/2ih2QQ9
By Marc Jones
LONDON, March 30 (Reuters) - Emerging markets have had a stellar start to the year, with equities delivering world-beating returns in the first 2017 quarter and the Mexican peso topping currency gains with a 10 percent bounce against the dollar.
There have been the odd laggard - Turkey has seen the lira slump and some Latin American commodity plays have retreated as oil prices have toppled back again - but for the most part it has been a bumper few months.
"We have been in an unloved asset class for a long time and because we had good year last year a lot of people are now coming back in," said Aberdeen Asset Management EM portfolio manager Viktor Szabo.
As this Reuters checklist shows http://tmsnrt.rs/2egbfVh Mexico's peso MXN= has recouped almost all of ground it lost after Donald Trump's U.S. election. Other strong emerging currency performers so far this year include the rouble and the zloty.
The FX tailwinds have helped MSCI's emerging equity index .MSCIEF rise a tidy 13 percent, outperforming developed peers.
The strongest performers have been Polish stocks .WIG20 , having risen 20 percent in dollar terms after years of underperformance, helped by a 6-percent jump in the zloty PLN= .
Chilean, Mexican, Indian, Chinese, Brazilian and Turkish stocks have taken off, climbing somewhere between 18 and 10 percent in dollar terms. http://tmsnrt.rs/2hn5N02
Bonds denominated in emerging currencies have also had a blinder returning 7 percent as major economies like Brazil have chopped down interest rates, the global growth outlook has improved and investors' worries have stayed largely dormant.
That compares to a paltry 0.8 percent for U.S. Treasuries and just 1.4 percent for German Bunds http://reut.rs/2ne9sjH
"Some of the concerns around the policies of the new Trump administration, on trade and on China, have not been put to rest necessarily but they have been mitigated some what," said PIMCO emerging market portfolio manager Yacov Arnopolin.
"A stabilisation of China's economy and the renminbi has also been a positive," he added, saying it had created something of a "virtuous cycle".
Emerging sovereign dollar bonds have returned 4 percent, led by an 8 percent gain by Egypt after it secured an IMF deal late last year. Even South Africa has rallied strongly despite worries about the future of its finance minister and investment grade sovereign credit rating.
NEXT QUARTER BACK?
The coming few months have plenty in store, starting with a meeting between U.S. and Chinese presidents Donald Trump and Xi Jinping next week that will set the tone on issues from trade protectionism and currency manipulation to North Korea.
Czech central bankers hope to avoid Swiss franc-style chaos as they remove their 27-per-euro cap on the crown, Indonesia could be lifted to investment grade by S&P not to mention Turkey voting on U.S.-like presidential powers for Tayyip Erodogan.
PIMCO's Arnopolin says EM is looking "in pretty decent shape on a cyclical horizon" and is likely to be less volatile than some of world's developed markets, but others sense the recent pace of the rally may require a breather.
The IMF is expected to downgrade growth forecasts for large parts of Latin America and Reuters data shows there are currently twice as many puts - or bearish bets - on the iShares MSCI Emerging Markets exchange-traded fund, as bullish ones. http://emea1.apps.cp.thomsonreuters.com/Apps/most
What's more, asset correlations have started to break down, most notably in the dollar's inverse relationship with commodities. Normally, a rising dollar means lower commodity prices, and vice versa. But both have fallen in recent weeks.
"We are at a crucial stage of this EM rally now, said Rabobank's Matys.
"What is really vital though is that the Trump administration provide some concrete details on its big fiscal plans. Promises and pledges are not enough any more."
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Global Assets in 2017
http://reut.rs/2ne9sjH World FX rates in 2017
http://tmsnrt.rs/2egbfVh EM stocks in 2017
http://tmsnrt.rs/2hn5N02 EM currencies in 2017
http://tmsnrt.rs/2hniYya EM bonds
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.