You could have made the same bear case against emerging markets 10 years ago and you would have missed a decade of outperformance, says Everest Capital chief Marko Dimitrijevic, rebutting Goldman's recommendation to cut holdings in the sector. "If you reduce or ignore emerging markets, you're going to miss on literally hundreds of companies that are great."
Overall, Dimitrijevic overall return estimates are just slightly higher than Goldman's, but the real alpha is to be made in specific sectors - education in Brazil, infrastructure in Mexico, retail, cement, oil and gas in Colombia, and consumer plays in Saudi Arabia.
Everest is most bullish on frontier markets, or, as Dimitrijevic calls them, "EM 2.0." "It's a secular opportunity that reminds us very much of what now-mainstream emerging markets were like 15 or 20 years ago."
Everest had a big year in 2013, gaining 41.2%. Its dedicated Frontier fund rose 28.8%.
Emerging market ETFs: EEM, VWO, DEM, EDC, DGS, EDZ, EEMV, EEB, SCHE, EDIV, IEMG, DVYE, BIK, EWX, EEV, BKF, PIE, CEW, ADRE, HILO, EUM, FNI, EET, GMM, PXH, EEMS, BBRC, EELV, FEMS, EEME, EMDD, BICK, EMCR, DBEM, FEM, EWEM, JEM, EVAL, EMLB, EMBB, EEHB, EGRW, TLTE, FNDE, EMSA, EMHD, EMDR, EMFT