“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.