Are you still invested in emerging market equities?

The truth behind 'cheap' valuations

Dimitry Griko of EG Capital Advisors

Dimitry Griko of EG Capital Advisors

Over the past year or so, investors may have read numerous articles by emerging market (EM) equity fund managers highlighting the current low valuations in their asset class and why this makes it an attractive investment case.

It is certainly the case that EM equities currently look cheap compared to its developed counterpart on pretty much every metric, whether that is EV/EBITDA (enterprise value-to-ebitda), P/E (price-to-earnings) or P/B (price-to-book). However, this misses two important points. The first is that emerging market equities have always been cheap compared with developed markets and it would be unwise to bet against this changing overnight the next time the cycle turns. Investing in emerging markets healthcare: The main market drivers For example, a forward P/E ratio of 12 for emerging ma...

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