Outlook on Emerging Markets

Summary
- We believe EM equities are one of the most mispriced asset classes globally in terms of improved earnings growth and financial productivity, as indicated by return on equity, free cash flow yield, and dividend yield.1
- Driven by more than just China, EM economic growth—and optimism—have moved higher as developed markets’ growth has slowed.2
- We maintain a constructive outlook for emerging markets debt (EMD) driven by favorable policy trends, contributing to expectations of meaningful spread compression and opportunities for alpha generation.
- As EM countries continue to improve policy, we believe a return of investors—and inflows—should build in 2024, attracting at least half of the money that left the asset class over the last couple of years.