(Bloomberg) -- Emerging-market rallies are a lot more likely early in 2019 than later in the year, when attention starts focusing on a possible U.S. economic downturn, according to Goldman Sachs Group Inc.’s Alberto Ramos.

While most developing-nation assets will rebound from this year’s turmoil, they’ll probably produce low single-digit returns, said Ramos, the firm’s chief Latin America economist. His top picks for 2019 include emerging-market equities hedged against non-U.S. stocks as well as the Colombian peso and Brazilian real.

Assets in the developing world have been battered this year by a litany of concerns including a U.S.-China trade spat that shows few signs of easing and worry that rising U.S. interest rates will lift the dollar, reducing the allure of riskier securities. MSCI gauges that track stocks and currencies are both headed for their first losing years since 2015. Still, Ramos says there’s reason for optimism as 2018 draws to a close.

"Hopeful pessimism," Ramos said during the Emerging Markets Traders Association’s annual meeting on Thursday. "Positions haven’t flushed out in a significant way during 2018."

Mexico, Brazil:

  • Counsel for Mexican President Andres Manuel Lopez Obrador: "The advice to him would be not to rock the boat and think instead of ways to increase long-term growth potential."
  • On Brazil’s Jair Bolsonaro: "We’re not concerned about policy direction. Actually, we’re inspired by it. We think the Bolsonaro administration is being advised by and has a team that’s one of the most liberal in terms of thinking that we’ve seen in the last 20 or 30 years. But the biggest question is on governability."

To contact the reporter on this story: Ben Bartenstein in New York at bbartenstei3@bloomberg.net

To contact the editors responsible for this story: Rita Nazareth at rnazareth@bloomberg.net, Alec D.B. McCabe

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