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Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
Why the Turkish market takes the prize for the best performer in 2022

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Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
The Turkish stock market has performed better than any other global counterpart in 2022 to date, leaving its wider emerging markets benchmark for dust. The ISE National 100 index in Istanbul is up 72.2% as of 21 September 2022.
These gains have been eked out despite sky-high inflation. This perhaps reflects the country’s decision to go against the grain and cut interest rates and attempts by Turkish investors to get a return at least somewhere approaching an 80% inflation rate.
A recovery in the all-important tourist industry in the wake of the pandemic may also have helped sentiment, while Turkey is also benefiting from a reallocation of global supply chains.
At the same time Turkish stocks are inexpensive after years of underperformance which has left its weighting in the MSCI Emerging Markets index at very modest levels.
Over the last 10 years the annualised return from the MSCI Turkey index is -4.9% compared with 5.7% for MSCI Emerging Markets as the country has endured political instability and a currency devaluation.
Writing in 2021 the OECD noted that: ‘For a more inclusive and sustained recovery structural challenges such as low labour force participation of women, widespread informality, weak skills, rigid employment rules hampering reallocation and large share of low-quality employment have to be addressed.’
Unlike other emerging markets there are limited signs of innovation in the Turkish economy, with technology under-represented in the Turkish market. Instead the industrials and financials sectors dominate, accounting for more than 50% of the MSCI Turkey index.
This outlook is part of a series being sponsored by Templeton Emerging Markets Investment Trust. For more information on the trust, visit here.
These articles are provided by Shares magazine which is published by AJ Bell Media, a part of AJ Bell. Shares is not written by AJ Bell.
Shares is provided for your general information and use and is not a personal recommendation to invest. It is not intended to be relied upon by you in making or not making any investment decisions. The investments referred to in these articles will not be suitable for all investors. If in doubt please seek appropriate independent financial advice.
Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.
The value of your investments can go down as well as up and you may get back less than you originally invested. We don't offer advice, so it's important you understand the risks, if you're unsure please consult a suitably qualified financial adviser. Tax treatment depends on your individual circumstances and rules may change. Past performance is not a guide to future performance and some investments need to be held for the long term.
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