EM's with eyes on Fed and currency risk - looking to hedge? - BBh

Analysts at Brown Brothers Harriman explained that whatever the pace and scope of Fed tightening is, we still believe it is very important for investors to continue focusing on country fundamentals and also on hedging out currency risk whenever feasible.

Key Quotes:

"Regionally, Latin America is the best equity performer so far in 2016 (up 24.3%), followed by EMEA (10.1%) and then Asia (7.1% YTD).  We expect this performance trend to reverse a bit as we move into 2017.

Our 1-rated grouping (outperformers) for Q4 2016 consists of Czech Republic, Korea, Poland, Israel, and Singapore.  Israel improved from 2 to 1, while China worsened from 1 to 2.  

Our 5-rated grouping (underperformers) for Q4 2016 consists of Turkey, Russia, Egypt, South Africa, and Brazil.   Indonesia improved from 5 to 4, while Turkey worsened from 4 to 5.

Other noteworthy moves include Taiwan, which improved from 3 to 2.  India and Thailand also improved, both from 4 to 3.  On the other hand, Chile worsened from 2 to 3 while Qatar and Colombia both worsened from 3 to 4."