- I remain reluctant to add to broad US equity funds at the moment. After building sector-specific allocations, I am now shifting attention outside of U.S. borders.
- Emerging markets are seeing stronger growth metrics right now and that could continue as the global economic recovery gains steam.
- The relative value of emerging markets, compared to the S&P 500, is attractive on a historical level.
- Corporate tax increases are a major headwind for the U.S. and also the developed world as a whole. I see this as less of a risk in emerging markets. Further, I believe the risk is currently being discounted.
For further details see:
EEM: I See A Case For Emerging Markets, But Don't Pick The Wrong Fund