Pimco Adviser Doubles Down on Emerging-Market `Trade of Decade'

Inside the Risks and Rewards for Asia's Emerging Markets

The party might be just be starting for emerging-market equities even after an 82 percent jump in two years.

Research Affiliates, a sub-adviser to money managers including Pacific Investment Management Co., says developing-nation stocks will produce annual average real returns of 6 percent during the next decade, surpassing every other asset class.

If that sounds familiar, it should: These are the same folks who predicted back in February of 2016 that emerging markets would be the "trade of a decade."

Trade of a Decade?

Pimco sub-adviser sees emerging-market equities leading returns over next decade

Source: Research Affiliates, LLC data as of 12/31/17

Other asset classes expected to outperform include a European leveraged buyout strategy, an index of developed-market equities from Europe, Australasia, Israel and Asia as well as emerging-market local bonds.

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