Emerging market funds have been trailing so far in 2013, leading some to worry about the strength of the rally in global equities.
“Emerging market stocks are a great area to watch for a read on global sentiment, given that most EM countries are dependent upon cyclical growth expectations and export demand,” said Michael Gayed, chief investment strategist and co-portfolio manager at Pension Partners. [Are Emerging Market ETFs Raising a Red Flag?]
The chart below shows the relative performance of the emerging market ETF versus the S&P 500 fund.
Full disclosure: Tom Lydon’s clients own SPY and EEM.