Relative to the U.S., emerging markets have been a serial underperformer over the last couple of years. In the last couple of months, though, there have been some signs that the sector is stabilizing. The chart below compares the ratio of the MSCI Emerging Market Index (using EEM as a proxy) to the S&P 500 (using SPY as a proxy). When the line is rising, it indicates that emerging markets are outperforming the U.S. and vice versa when the line is falling.
While emerging markets have been underperforming for all of 2013 (and more), the ratio is actually at the same level it was at six weeks ago. That is something we have not been able to say at any other point in 2013.