Earnings growth is also a major contributing factor as Deutsche anticipates earnings to grow at more than 10% over the course of the next year in the benchmark MSCI Emerging Markets Index.
Discounted valuations, especially in an environment where U.S. equities are trading near record levels, provide a relatively attractive opportunity for investors. Even after the strong start to this year, current price-to-earnings ratio of MSCI EM is around 15.1, compared to the 22.2 for MSCI USA Index.
DBEM holds nearly 850 stocks. Over 28% of the ETF’s holdings hail from the technology sector. Financial services and consumer discretionary names combine for almost a third of the ETF’s sector weight. China, South Korea and Taiwan combine for about 57% of DBEM’s geographic exposure.
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