Gavekal Capital: Outperformance of Emerging Markets Continues

Wednesday, July 30, 2014

Outperformance of Emerging Markets Continues

Since the end of 2010 betting on the outperformance of developed market (DM) stocks relative to emerging market (EM) stocks has been a sure bet. Not so much in 2014. So far this year EM stocks have outperformed the DM by about 2.5%, but since March EM has outperformed DM by nearly 9% (chart 1 below). On a YTD basis the UAE, India and Indonesia round out the top while Russia and Hungary bring up the rear (table 1 below). On a QTD basis we still see the UAE at the top and China has made its way to the top of the list as well, but Russia and Hungary still round out the bottom.

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MSCI EM sorted by YTD performance high to low:
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MSCI EM sorted by QTD performance high to low:
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