The bull and bear case for emerging markets

Despite a strong rally year-to-date, emerging markets continue to trade at a discount to developed markets. This suggests their recovery, in stock market terms, is not of excessive proportions, with more room for growth over the remainder of the year. Indeed, we believe the easy money has been made, and that growth in these regions will now be driven more by company earnings than macro dynamics. This does not mean emerging markets might not face a re-rating, similar to that experienced in 2010 when multiples were at a premium. What is clear is that a continuation of ultra-easy monetar...