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JPMorgan's EM picks for the non-taper

  • Extrapolating the Fed's more dovish stance to emerging markets, JPMorgan upgrades Turkey  (TUR) and Peru (EPU) to overweight, where they'll join Mexico (EWM), Thailand (THD, TTF, TF), The Philippines (EPHE), and Taiwan (EWT).
  • "Turkey feels like the tapering trade," says the team. "The suffering this summer turns to euphoria as the Fed returns to dovishness and retreats from tapering."
  • Taiwan and Mexico rate an overweight because of their exposure to developed world growth, but what about Korea (EWY, FKO, KORU, KORZ)? Typically, the country belongs in this group, but JPMorgan is cautious on high-end tech and thus on Samsung. Taiwan, on the other hand, should benefit from the growth in low-priced smartphones.
  • Moved to underweight are Russia (RSX, ERUS, RBL, RSXJ, RUDR) and Colombia (GXG, COLX, ICOL).
  • Top 10 individual stock picks include ICICI Bank (IBN), Southern Copper (SCCO), and Cemex (CX).
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