Emerging Market ETFs Look Cheap

“Emerging economies of the world are right at the sweet spot for GDP growth,” Arnott added. “The median age in the emerging markets is 30. In the developed world, [it’s] 43.”

Arnott also argues that investors are too concerned with chasing yields and shunning underperforming areas. However, there is a greater chance for underperforming markets to pick up speed while outperforming areas slow. In the current environment, emerging markets may be a good contrarian play. Year-to-date, FNDE has declined 16.0% and PXH fell 12.5%, whereas the S&P 500 rose 8.9%. [Emerging Market ETF As A Contrarian Play]

“Human nature conditions us to chase what has performed best,” Arnott said. “What has performed best feels good. And yet any student of the market knows that’s a dumb way to invest.”

For more information on the developing economies, visit our emerging markets category.

Max Chen contributed to this article.