Investors Turning Their Gaze to Emerging Market Equities: Mobius

After the longest stretch of quarterly gains in U.S. equities since 2015, investors are looking toward emerging markets as they seek fresh opportunities, says Mark Mobius.

“The performance of U.S. equities has been very good and now people are starting to think it’s time to diversify and they have been underweight emerging markets,”  Mobius, executive chairman at Templeton Emerging Markets Group, said in an Aug. 30 interview in Manila.

The S&P 500 Index has rallied 28 percent since end Sept. 2015, beating the MSCI All World Index. However U.S. equity funds had $2.6 billion in outflows in the week of Aug. 23, while emerging markets attracted about $200 million, Bank of America Merrill Lynch reported last week, citing EPFR Global data. 

Emerging markets will outperform developed market equities on faster economic growth, rising incomes and cheaper valuations, Mobius said. “This outperformance can run about five years once you have momentum.”

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