“In Brazil, labor reform passed earlier this year gives companies more flexibility in managing their workforce, potentially leading to lower labor expenses,” said BlackRock. Elsewhere, India has seen some of the most substantial reform progress among EMs, kicked off by Prime Minister Narendra Modi’s election in 2014.”

Analysts expect Brazil’s economy to grow modestly this year before posting more impressive growth figures in 2018. Still, that is better than the recently ended recession, which plagued Brazilian assets. Falling interest rates throughout the developing world, at a time when some developed markets are considering boosting borrowing costs, are helping the case for emerging markets equities.

“Many EM central banks are able to cut policy rates even as the Federal Reserve normalizes and other developed market central banks weigh cutting back accommodation,” according to BlackRock. “We calculate seven major EM central banks, including Brazil’s and India’s, collectively delivered more than 1,000 basis points in rate cuts through October of this year. Mexico was the only major EM central bank to increase rates in 2017.”

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Tom Lydon’s clients own shares of VWO.