Emerging Market (EM) equities have lagged Developed Market (DM) equities since 2010. The justification for this persistent relative performance has been very well debated, with conclusions often validated by the superior earnings delivery of DMs through a period of low global interest rates, lower growth, and lower inflation. This has also been an extended period of decline for global capital expenditure and real investment, which has been to the detriment of EM equities.
Looking ahead, we believe we are in the initial stages of a substantial structural change in the global economy. At the same time, EMs are benefiting from a convergence of positive factors. This can lead us into the next bull cycle for EM equities.
Read Eastspring’s Deep Dive into Global Emerging Market equities
