The emerging markets have been one of the bigger disappointments in terms of performance over the last few years, but there are pockets of opportunity, with some regions displaying fewer imbalances than others.
With the plethora of emerging market equity indexes that have come into existence, there are more options for fine-tuning the type of emerging market exposure desired.
In a prior blog, my colleague looked at the dividend yield of the MSCI Emerging Markets Index (MSCI EM) as a potential indicator of the emerging markets being “inexpensive.” Here, I turn to the price-to-earnings (P/E) ratio —specifically the P/E ratio of sectors and countries within the MSCI EM.
EM Equities has a history extending back to December of 1987 and thus encompasses a variety of market environments. Our goal is to construct a framework allowing us to analyze the valuation levels of EM Equities over a period of approximately 25 years.