WisdomTree explains why it remained constructive on emerging market equities entering 2013, arguing that attractive valuations created a favorable backdrop despite recent volatility. The paper highlights how higher dividend yields have historically coincided with stronger future returns, noting that the MSCI Emerging Markets Index yielded 2.69% at the start of 2013.
We Are Still Bullish on Emerging Market Equities for 2013
WisdomTree
Jeremy Schwartz
Article
1 Pages
Key Takeaways
Valuation Signal: Starting dividend yields of 2.69% ranked above the historical median of 2.25%, suggesting more attractive valuations than many prior periods.
Historical Return Gap: High dividend yield years produced average 12 month returns of 33.03%, compared with just 1.90% during lower dividend yield periods.
Recovery Potential: Following the 2008 peak dividend yield of 4.75%, the MSCI Emerging Markets Index gained 79.02% over the subsequent 12 months.
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