Some investors may have taken the recent Fed inaction as a signal to jump on a relatively cheap asset that has been selling off this year. EEM currently trades at a 11.3 price-to-earnings ratio and a 1.4 price-to-book, whereas the S&P 500 index has a 17.6 P/E and a 2.4 P/B.
Nevertheless, despite the Fed’s dovish stance, potential emerging market investors are still left with the impending rate hike around the corner.
“This isn’t necessarily positive news,” Mark Mobius of Franklin Templeton Investments, one of the biggest specialist EM fund managers, told the Financial Times. “We are still left with the uncertainty that has been plaguing the market for some time.”
iShares MSCI Emerging Markets ETF
For more information on the developing economies, visit our emerging markets category.
Max Chen contributed to this article.