Now's the time to revisit emerging markets

ON ASSET ALLOCATION

T.Bailey's Elliot Farley discusses why he is rebuilding his emerging market exposure.

For several months we have been underweight emerging markets. In the face of mounting inflationary pressures and signs of a property bubble building in China at the end of 2010, the feeling was these markets were overreaching themselves. The conflict in Egypt at the beginning of the year only added to nervousness surrounding political risks and saw EM weakness continue. This political situation remains in the balance but extreme fears have subsided.  Furthermore, governments have acted to curb inflation, which shows little sign yet of running rampant. The introduction of austerity mea...