There's plenty to underpin a brighter future for emerging market equities

INVESTORS who have been dismayed by the underperformance of emerging market (EM) equities relative to developed markets over recent years should consider whether EM equities' recent rebound in relative terms is structurally sound or just a case of temporary mean reversion.

In this column, we first question some of the misconceptions that appear to be at the root of bearish views on this asset class.

Then we explain why we believe that higher productivity growth, structural reforms, an expanding middle class and spreading urbanisation all suggest the outlook for emerging equities remains bright.