Why emerging markets have underachieved since 2013



Russ answers more client and reader questions – this time about emerging market equities and debt.

I’ve been writing a lot lately about investing in emerging markets.  In recent pieces, I’ve explained the case for emerging market bonds as well as why underperforming emerging markets equities are worth a second look.

It’s no wonder, then, that many investors are asking me for more details regarding my views of emerging market debt and equities.

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So today’s “Ask Russ” blog post is dedicated to answer those queries, including some questions I received during a recent call with clients. If you have an investing-related question you’d like me to answer, please post it in the comments section below. Also, be sure to check out earlier installments of this series.

Market Realist – The graph above compares the price returns of the iShares MSCI Emerging Markets Fund (EEM), the S&P 500 (SPY)(IVV) and the iShares MSCI EAFE Index Fund (EFA) since the start of 2013. The U.S. index has stood out with holding period returns of 31.5%, which are much more than the -7.7% and 6.0% of emerging markets and developed markets (VEA), respectively. Emerging markets (VWO) have actually eroded investor wealth since January 2013.

Please read the next part of this series to learn about the debt situation in emerging markets.


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