Emerging market stocks and bonds, which have outperformed most other markets this year, can continue to lead if the dollar doesn’t strengthen, according to a recent investment panel at the UBS Global Forum in New York.

(Related: Pimco, BlackRock See Multiyear Rally for Emerging Markets)

“The tightening cycle is now easier, rates are down and the foreign exchange risk is remarkably benign,” said Jeffrey Rosenberg, BlackRock’s chief fixed income strategist. “Global markets have massively outperformed,” he said, noting that the best performers have been priced in local currencies, which have appreciated against the dollar.

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Also supporting emerging market securities, according to the panel, titled “Investing in the ‘New’ New Normal,” is a decline in geopolitical risk.

(Related: Investors Say End of Bull Market Is Coming, but They Feel Fine)

“There’s more geopolitical risk in the U.S. and Europe than there is in emerging markets,” said Tom Goggins, senior portfolio manager at John Hancock Asset Management. But that’s not the case for all emerging markets. “Don’t buy Venezuela … and Nigerian bonds yielding 6.5% are not attractive,” said Goggins.

Year to date, the iShares MSCI Emerging Markets Index ETF (EEM) has gains almost 29%. The JP Morgan USD Emerging Markets Bond ETF (EMB) has returned more than 9%.

But the strength of emerging markets and other international assets could reverse if the dollar strengthens.

“Risk assets are priced for a near perfect environment,” said Matt McLennan, head of the global value team at First Eagle Investment Management.

When asked for his best investment idea for the next six to 12 months, the bottom-up stock picker and portfolio manager of the First Eagle Global Value and International Value funds said he has “no idea.” His portfolios are heavily invested in equities (70%) but his hedged with cash (about 20%) with the remainder in gold. “There’s a struggle to find value.”

Jeremy Zirin, chief equity strategist at UBS, said he favors international stocks over U.S. stocks overall, including European stocks, but sees an “interesting opportunity” in energy stocks, which have been the worst performers year to date. “Their fundamentals of supply/demand are improving and they’re trading at cheapest price to book,” said Zirin.

McLennan agreed that energy stocks are the most undervalued, but he’s concerned about second-lien debt.