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CONTRIBUTORS

Chris Galipeau

Senior Market Strategist
Franklin Templeton Institute

Lukasz Kalwak, CFA

Market Strategist
Franklin Templeton Institute

Preview

After years of US outperformance, we believe emerging markets now offer the best combination of forward earnings and valuations.

Key takeaways

  • US stocks have led the world with the best performance and earnings growth over the past 15 years, but that picture could be changing.
  • According to our analysis, emerging markets have the strongest projected earnings growth in the next few years.
  • Current and historic valuations also suggest it’s time to consider greater exposure to emerging markets.

Read the full paper to explore why we believe investors may be well served to consider emerging markets when comparing equity opportunities.

WHAT ARE THE RISKS?

All investments involve risks, including possible loss of principal.

Equity securities are subject to price fluctuation and possible loss of principal.

International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. Investments in companies in a specific country or region may experience greater volatility than those that are more broadly diversified geographically.

IMPORTANT LEGAL INFORMATION

This material is intended to be of general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy. All investments involve risks, including possible loss of principal. There is no guarantee that a strategy will meet its objective. Performance may also be affected by currency fluctuations. Reduced liquidity may have a negative impact on the price of the assets. Currency fluctuations may affect the value of overseas investments. Where a strategy invests in emerging markets, the risks can be greater than in developed markets. Where a strategy invests in derivative instruments, this entails specific risks that may increase the risk profile of the strategy. Where a strategy invests in a specific sector or geographical area, the returns may be more volatile than a more diversified strategy.

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