The opportunities from EM underperformance

Austin Forey, manager of the JPMorgan Emerging Markets investment trust, explains why despite many emerging market funds' underperformance in recent months, investors must not be swayed by short-term headwinds

There is no doubt emerging markets as an asset class has had a difficult time of late, offering investors mediocre returns. By relative comparison with the US, where the economy is recovering, emerging markets look undeniably challenged. Part of the relative underperformance has stemmed from disappointing earnings. If one looks at the primary drivers of corporate profits, investors can begin to understand the industry mix in emerging markets is differentiated from developed markets. Primary commodities such as oil and gas and mining have historically been a big part of aggregate EM corp...