Asset Allocators' Soapbox: Can the EM rally continue?

Emerging market equities should continue to outperform their developed counterparts in the near future. Emerging equities have rallied in recent months, on a combination of improved economic growth and investors preferring their attractive valuations. We think the 25% discount emerging stocks offer to developed ones (on a forward p/e basis) does not look justified given improved longer-term prospects.  Economic news in the developing world has produced more positive surprises versus the developed world for the first time in two years, suggesting economic momentum might be shifting in ...