Some investors turning from US stock market to emerging markets

The S&P 500 fell 1 percent last week, its second consecutive weekly decline.

Investors may be becoming nervous about the US stock market.

Last week, John Hussman wrote that “investors are becoming increasingly selective...their psychology has subtly shifted away from speculation, and toward risk-aversion”.

As evidence, Hussman pointed out that “recently, the 2% advance of the S&P 500 Index beyond its late-January high has been accompanied by a sharp narrowing of participation and leadership across individual securities”.

Some investors may be looking for better returns elsewhere.

A report from Reuters said: “Portfolio managers from Harding Loevner, Federated Investors, and Wells Fargo are among those who have been adding emerging markets stocks to their portfolios in the face of the imposition of import tariffs by President Trump and rising interest rates in the U.S.”

“We’re finding opportunities because of the trade war,” said Chris Mack, a portfolio manager of the Harding Loevner Global Equity fund.

“People are slow to come around to the realization that the U.S. isn’t going to close its borders to all emerging markets,” said Brian Jacobsen, senior investment strategist at Wells Fargo Asset Management.