A conservative assessment of valuations suggests that emerging market equities are still priced to d...
A conservative assessment of valuations suggests that emerging market equities are still priced to deliver attractive returns, especially when compared to the developed markets. Common sense real return expectations for asset classes are best calculated by considering the components of return. Our favoured methodology is to classify the sources of return into change in valuation, growth in fundamentals and income. Using conservative assumptions and relying on the principle of mean reversion ' that is, our best guess for the medium term is that valuations and growth will approximate th...
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