In December we wrote that emerging market (EM) stocks were pretty cheap and may be worth owning for investors with patience and a reasonable time horizon.
According to Morningstar, EM stocks have average returns of negative seven percent for the last five years. Clearly, its been a pretty harsh bear market. But perhaps things are turning around this year as EM stocks are doing rather well, up over 6% year to date.
At some point, EM stocks will experience a nice bull market. Good things tend to happen to investors owning cheap assets. And EM stocks are about as cheap as they’ve ever been.
Speaking of emerging markets, one of our favorite funds is the Seafarer Overseas Growth and Income fund. There was a nice write up on it in Barron’s recently, which you can read here.