MSCI to add China A-Shares to emerging markets index: What does it mean for investors?

The decision brings better representation of the entire Chinese economy

After four years of discussions, on June 20, 2017, MSCI announced a ”yes” decision on including China A-shares in the MSCI Emerging Markets Index, which tracks $1.6 trillion1 worth of assets around the world, and related indexes.2 The decision is seminal because it provides previously unavailable A-share exposure in emerging markets (EMs) and global indexes. The initial weight of China A-shares in the MSCI Emerging Markets Index upon the August 2018 inclusion will be 0.73% (2.49 % in the MSCI China Index), comprising 222 onshore-listed stocks. The number of stocks is higher than the originally proposed 169 stocks in March’s consultation paper.

This change is


Asian markets: Carrying some positive momentum into 2017

Is this the beginning of a long-awaited up cycle?

Last November, the Invesco International and Global Growth team reported that in Asia ex-Japan, the building blocks were in place to shore up top-line growth. Our outlook for Earnings, Quality and Valuation (EQV) was cautiously positive. 2016 marked the first time in five years where earnings forecasts did not collapse at year-end, and an upward bias to earnings forecasts has continued into 2017. Is this the beginning of a new earnings growth cycle?

For years, slowing top-line growth in Asia, combined with an inability to raise prices, had driven consistently negative earnings revisions. So far, 2017 is proving to be different. Earnings forecasts are being revised


International equity fundamentals show improvement

As our strategy turns 25, we discuss the keys to our EQV philosophy

This year marks the 25th anniversary of Invesco International Growth Fund. In that time, we’ve seen the performance pendulum swing widely across global regions and investment styles. But no matter the market conditions, our focus on EQV — Earnings, Quality and Valuation — has remained constant.

To kick off our 25th year, most international markets had strong performance in the first quarter, driven by an improving macroeconomic backdrop overseas and a weakening US dollar. Importantly, as we look at the markets through our EQV perspective, we have seen some encouraging changes:


Europe: Are elections overshadowing opportunities?

Election risk is real, but we see strong potential in certain areas

Ask any investor in Europe what concerns them most, and election risk will likely be near the top of the list. With French and German elections looming, and the fallout from the UK’s Brexit vote ongoing, that concern is to be expected. However, the Invesco International and Global Growth team believes that election risk — while real — may be overstated. Looking through our EQV (Earnings, Quality and Valuation) lens, we believe that valuations in the highest-quality companies are expensive, but we have been opportunistic in finding new names that are seeing short-term dislocations.

Elections take center stage in France and Germany


Finding dividend opportunities as the profit cycle ages

A high-conviction, bottom-up approach to finding sustainable profit margins

Walsh_Meggan_sm_150dpi_RGB 0814As dividend value investors, my team is focused on sustainability of profit margins over a full profit cycle. I believe that we are in the later stages of the profit cycle, with corporate profit margins at about 1%1 below their peak levels in late 2014. What does that mean for us as high-conviction, bottom-up investors?


India’s economy: What does 2017 hold in store?

Driven by demonetization, India’s economic rejuvenation points toward a positive long-term outlook

Sambhshivan_Shekhar_sm_150dpi_RGBBy any measure, 2016 was a year of seismic economic change for India, particularly with the surprise “currency exchange program” in November, also referred to as demonetization. Three months after this unprecedented move, the overhang already seems to be behind us. Industrial production surged sharply by 5.6%, capital goods within manufacturing recorded 15% growth after several months of contraction, and electricity generation picked up to 8.9%.1 Overall car sales also reported an increase of 16% year-over-year.2 These positive macro points confirmed the view of the Equity Investment Team in Asia that the impact of demonetization would be transitory in nature.

Structural growth in India — especially domestic consumption — remains promising over the long term. Looking ahead, we expect