Will US markets continue to outperform EM equities?

Marina Akopian, fund manager at HEXAM Capital Partners, outlines the drivers that could aid a turnaround in fortunes for emerging markets.

Over the past two years the S&P 500 has significantly outperformed major emerging markets both in aggregate and individually.The S&P has beaten the MSCI Emerging Markets Index by 16% over the period, and outperformed China by 30% (in USD terms, May 2010 to May 2012). The same trend continued so far this year to the end of May. Despite fears of a US slowdown, a rating agency downgrade, and the ongoing deadlock on fiscal issue – the US market has continued to grind higher. External factors such as the European debt crisis and concerns about a China ‘hard landing’ have not seemed to affe...