This document highlights 20 stocks to own across EM to play the emerging market

story that reflect both our top-down and bottom-up views. All are Buy rated.

Structurally, the COVID-19 shock may well mean that the technological future arrives

early (and anecdotally perceptions are strongly skewed in that direction).

Nevertheless, in our view, investors may also be under-estimating the strength of a

prospective cyclical revival. In fact, both narratives could be simultaneously true. In

any case, timing a possible transition from growth to value is very difficult and we are

glad to have resisted the urge to do so, so far. For this reason, we recommend that

investors continue to own both growth and value strategies (Both growth and value –

not one or the other, John Lomax, 27 August).

Identifying value opportunities is to some extent more difficult than highlighting

growth. While many high frequency indicators point to a strong cyclical bounce back,

it is uneven and likely to remain so. In particular, as is already visible in mainland

China, infrastructure spending is likely to drive growth while consumption lags. Basic

materials and industrial plays still have significant potential to benefit. The financial

and energy sectors generally look as if they will be late cyclicals on this occasion and

performance is likely to be contingent on economic growth broadening. In our view,

this is likely to happen; it will just take quite a lot of time.

By country, we remain overweight mainland China (in a GEMs context) and

especially some of the commodity plays like Brazil and Russia. We prefer offbenchmark

Korea to on-benchmark Taiwan. These strategy observations are used

to guide the list of stocks suggested in this document. Where possible, we use FTSE

definitions to define value and growth – where this is not feasible we use our own

methodology. The ordering below is by market cap.