- Emerging markets used to deliver excess returns (as measured by the difference between ROE and cost of equity), but that gauge has fallen from 1.2% in January 2012 to -2.5% today - in other words, money is better invested in developed markets.
- Credit Suisse traces this to the decline in profit margins thanks mostly to years of emerging market wage growth outpacing overall inflation. It "is now jeopardizing core-emerging market labour competitiveness," says the bank's Alexander Redman and Arun Sai. The anecdotal reports of how China is no longer the low-cost producer thanks to soaring wages are well documented.
- EM equity ETFs: EEM, ADRE, SCHE, GMM, VWO, DEM, EWEM, PXH, PIE, EWX, DGS, EMLB, EDC, EET, EMSA, EDZ, EEV, EUM, TLTE, HILO, EELV, EEMA, EMFT, DVYE, FEMS, EVAL, EGRW, EMCR, IEMG, EMDR, EEME.
at Zacks.com (Oct 31, 2014)