Some froth in EMs has evaporated

ON EMERGING MARKETS

JOHCM's Ivo Kovachev Investors explains why investors currently have an attractive entry point into the long-term EM story.

Since emerging markets equities peaked in early January, investors have had plenty to contend with. The New Year ushered in a transformation in fortunes for different parts of the market as last year's laggards became this year's leaders. This "great rotation" included a market-wide shift out of high growth names, which succumbed to severe profit-taking, while mostly larger-cap stocks enjoyed a more rewarding start to 2011 after previously trailing. And, at least before the tragic events in Japan, there has been a clear change of leadership at the asset class level. Developed markets ...