EM equities may benefit
Emerging-market (EM) equities are off to a strong start in 2025, up 4.5% through March 14 in US-dollar terms. But investors could be excused for being wary. After all, emerging markets have struggled over the past decade.
Yet today, EM equity fundamentals are gaining momentum on the strength of upward-trending earnings estimates. And performance looks better from a longer-term perspective. Our analysis shows that, despite fluctuations, EM stocks have outpaced their developed-market (DM) counterparts since 2001 (Display). This long-term performance gap, coupled with the pratfalls of trying to time the market, makes it risky for investors to be on the sidelines, in our view—especially if emerging markets can sustain their recent gains.
