Emerging market equities have outperformed by a wide margin, up 17% so far this year, versus the S&P 500’s rise of 9%.

As is the case with US markets, IT companies have driven gains, led by tech giants Tencent, Alibaba, and Baidu. Jan Dehn, head of research at emerging market-focused Asset manager Ashmore Group sees the trend continuing, as quoted by the Financial Times:

“The switch in global capital back to EM provides a supportive macro environment” while “in price-to-earnings [ratio] terms we are still well below where we have been in normal market conditions, valuations are not stretched”.

Though Dehn cautioned that EM stocks correlation with US markets means that “if we get a US stock market correction we would expect EM fixed income to do better than EM stocks.”