Why emerging markets offer value to your portfolio


Dec. 4 2020, Updated 10:50 a.m. ET

Truth: Emerging markets offer value. Given that they’re generally growing faster than their developed world counterparts, emerging markets still look cheap by most metrics. Currently, emerging market equities (EEM) are trading at about a 40% discount to developed country stocks. This represents the largest discount since the financial crisis.

Market Realist – Emerging markets—including China (FXI), Indonesia, India (EPI), and Brazil (EWZ)—are growing much quicker than their developed counterparts, including the U.S. (SPY), Japan (EWJ), and Germany. It makes sense to allocate part of your portfolio to a few of these economies.

What adds even more sense to investing in emerging markets is the fact that they’re trading at discount despite gaining lots of ground since February this year.

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