Emerging Markets Turnaround Signals
Russ Koesterich, CFA who is the Chief Investment Strategist for BlackRock has posted to his blog a number of “signposts” that will signal a turnaround in the underperformance of emerging markets. In this post Mr. Koesterich states “While I believe that EM stocks, which look undervalued relative to EM markets’ growth potential and healthy corporate profits, have the potential to out perform their developed market counterparts over the next several years, I see few immediate catalysts for a very near-term EM rally.”
We would agree that a near-term rally in emerging market stocks and bonds does not seem likely in the immediate future, but that is almost always the case before something does rally. The long-term case for emerging market assets is a good one, in our opinion, and merits an overweight of such assets in investment portfolios. As always, we believe speculation on the near-term is more noise and entertainment, and investors would benefit by taking a long-term view.
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