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  • Todd Peters

Unique Research - Emerging, Emerging!

2010 to 2020 was an extraordinary decade with the U.S. leading the world in growth and innovation. Investors benefited from positions in large company stocks. But as we said in previous Unique Research pieces, indications are that markets might be rotating in response to a new administration and new environment, leading to small outperforming large, international outperforming domestic, value outperforming growth, and emerging outperforming developed International.

Today we focus on Emerging because the data is significant.

As you can see Emerging Markets were a significant laggard during last decade.

But expanding the time horizon over two decades tells a very different story; the leader not the laggard.

And today, valuations for Emerging Markets are very attractive as compared to developed markets, and even more so compared to U.S. valuations (not shown).

But this chart is far and away the most significant and promising for Emerging Market equities. The growing middle class will mostly take part in developing countries, which is also where the growth in spending will occur - creating a real potential tailwind for their economies.

Just remember: to reap the benefits of potential EM outperformance you must think long-term and be willing to put up with the volatility.