The investment case for EMs versus developed markets

A legacy of ultra-low interest rates, high government debt, and subdued economic growth in developed markets is that investment returns from all major asset classes are low and likely to remain so for some time.

As investors consider how to diversify away from these subdued fixed income and equity markets in search of better returns, many are finding that emerging markets (EM) offer both attractive value and better long-term growth prospects. EM assets have not shared in the recovery developed markets experienced after the financial crisis of 2008/2009. Instead, EM assets came under sustained pressure during the 2011-2015 period due to weak economic fundamentals, geopolitical risks, and the stronger US dollar. Conditions have changed for the better on a risk/reward assessment taking into acco...