With football season upon us, it is becoming obvious even after just several weeks that some teams seem ready to capture the championship while others will need to rebuild and wait for better times. If you are a fan cheering for one of these rebuilding teams, it can be frustrating to wait for your team to take the necessary steps that will allow them to thrive.
It is no different when we make our allocation decisions. While we do not root for one asset class over another, we certainly have studied the longer-term winners and losers. The emerging markets equity asset class seems to be one of those teams that has been a long-term winner, although it occasionally suffers from some difficult years. While our analysis shows that the long-term prospects of this asset class remain robust, primarily because of demographic trends and strong long-term GDP growth projections of these countries, the shorter-term environment continues to be unfavorable.
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