When will emerging market (EM) stocks wake up and join the party?
Although global equity markets in developed countries have risen—and in the United States, have even touched all-time highs, EMs have lagged.
The Vanguard FTSE Emerging Markets ETF (VWO) is down 3% year-to-date versus a gain of 10% of U.S. stocks (VTI) and 5.5% for international stocks (EFA).
The SPDR BRIC ETF (BIK), which tracks the four largest EM countries in the world (Brazil, Russia, India and China) is largely considered a barometer of performance for the category. But like broader emerging market benchmarks, BIK fallen around 3.5% and has struggled to find its footing in 2013.
Could the weakness in EM equities be a buying opportunity? Research from BlackRock argues that investors shouldn’t throw out the baby with the bathwater.