China’s economic slowdown may further weigh on returns. The country’s exports and imports unexpectedly declined in June, while gauges of manufacturing fell. Finance Minister Lou Jiwei, speaking at the U.S.-China Strategic and Economic Dialogue in Washington on July 11, signaled the economy may expand less than the government’s 7.5 percent target this year and that growth as low as 6.5 percent may be tolerable in the future.
“This period of uncertainty can last a little bit longer than expected,” Mauro Ratto, the head of emerging markets at Pioneer Investments, which has about $216 billion under management, said in a phone interview on July 10. “It’s difficult to see a catalyst for the Chinese market.”