Ben Carlson, Columnist

Emerging Markets May Be Due for Their Comeback

We're at the beginning of a turning point in the cycle where this asset class outperforms U.S. shares.

September 22, 2017 at 9:00 AM UTC

Ben Carlson is director of institutional asset management at Ritholtz Wealth Management. He is the author of "Organizational Alpha: How to Add Value in Institutional Asset Management."

Changing of the guard.
Photographer: Bay Ismoyo/AFP/Getty Images

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Emerging-market stocks are quietly having a huge year. Through mid-September the iShares MSCI Emerging Markets ETF, known as EEM, is up more than 31 percent, outpacing gains in both U.S. and foreign developed markets, which are up 13 percent and 19 percent, respectively.

If you’ve been a long-term holder in emerging markets, this year’s gains have felt like they were a long time coming. Total returns in EEM from 2008 to 2016 were minus 16 percent. In that same time, the S&P 500 was up almost 85 percent. Before rallying double digits in 2016, emerging-market stocks were in negative territory in four out of five years beginning in 2011.