EFTA Document EFTA01458996

8 December 2015 World Outlook 2016: Managing with less liquidity The ghosts of EM crises past: equity over•allocation to EM has been completely unwound; EM FX to have overshot the relative growth slowdown; waiting for the Fed. Past EM crises occurred when US dollar up cycles (3/4 of the way through) coincided with US rate hiking cycles. Key difference now is that EM FX has already depreciated. EM growth normalization explains well the underperformance of EM equities and fall of EM FX. EM