Public Equities

Is It Time to Revisit Emerging Market Equities?

August 2025 – 5 min read

EM equities have faced significant headwinds over the past decade, but recent developments suggest a turning point may be in progress. So far, 2025 is proving to be promising, as EM equities have delivered double-digit absolute returns and have outperformed developed market equities.

Emerging market (EM) equities as an asset class has not rewarded investors for more than a decade. The EM asset class has been in a broad sideways trending trading range and has significantly underperformed developed market (DM) equities over this period.

Peak (starting) valuations, slowing economic growth, disappointing earnings delivery, a liquidity-sapping strong U.S. dollar and a lack of focus on corporate governance and shareholder returns have all weighed heavily on the asset class.

So far, 2025 is proving to be more promising. EM equities have delivered double-digit absolute returns year to date and have outperformed developed market equities. This performance is all the more impressive considering the backdrop of elevated trade tensions and rising tariffs for EM exports to the U.S.

We are encouraged by the recent behavior of emerging market equities and believe there are several factors underpinning a sustained period of absolute and relative performance.

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William Palmer

Co-Head Emerging Equities Team

Michael Levy

Co-Head Emerging Equities Team

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Is It Time to Revisit Emerging Market Equities?

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William Palmer

Michael Levy

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