XSOE

When we look at the emerging world, there are hundreds of listed SOEs that make their way into indexes such as MSCI Emerging Markets.With 25% of the MSCI Emerging Markets Index still populated by the Cold War's leftover SOEs, many investors have significant capital tied up in companies that incorporated under Mao Tse-tung and Joseph Stalin.WisdomTree has three emerging market ETFs that are designed to stay away from SOEs.

Looking back, EM equities have as a whole been resilient, with the MSCI Emerging Markets Index marginally positive year to date-performing broadly in line with the S&P 500 and MSCI World indexes.On the economic front, EM activity has continued to rebound, albeit at varying speeds across countries.Meanwhile, EMs have shown a continued appetite for structural reforms that could lay the foundation for lasting economic recoveries.EM corporate resilience - especially in industries bolstered by the pandemic - is likely to anchor market sentiment.

The rebound in asset prices and the easing in global financial conditions have benefited not only advanced economies, but also emerging markets.Policy measures have allowed firms to cope with cash shortages experienced during economic shutdowns by taking on more debt.Looking ahead, policymakers should carefully sequence their response to build a safe bridge to recovery.

Emerging markets are in the process of economic healing despite the uneven impact of COVID-19.China, in particular, has been well positioned for economic recovery in the third quarter and continues to move full steam ahead with gains in investment, industrial production, and services activity.Investing in emerging markets is for the long haul.

Emerging markets have had different approaches to coping with COVID-19 and are at different stages of recovery.Our emerging markets equity team examines trends, news and data shaping emerging markets in the third quarter, and shares its latest outlook.The market had expectations for greater normality into the final quarter of 2020, but with rising COVID-19 cases in Europe and select countries globally, it is evident the virus will persist.

The election remains the great wild card, with the Senate nearly as large a factor as the White House.We remain underweight in international developed equity markets relative to ACWI.Europe had done an admirable job of containing the coronavirus in the summer months, but the recent rise in new cases and the impact on economic activity give us cause for concern.