While the MSCI China Index has been the best performing country index year-to-date (YTD) (+23%), concerns that the rally in emerging market (EM) equities may be over is premature. First, YTD, broader EM (+14.0%) and Asia EM (+15.3%) have underperformed the S&P 500 (+16.4%)*. Second, over the last year, China, EM Asia, and EM broadly have underperformed the S&P 500 by 10%, 11% and 13%, respectively. As a result, there still appears to be some catch-up ability on behalf of EM equities. Emerging markets, particularly in Asia, remain one of our favored regions for several reasons including:
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