Emerging Markets – The Investor’s Growth Haven

Institute of Managed Accounts Professionals

30 April 2026

Emerging markets offer a compelling growth-to-valuation trade-off compared to the Nasdaq, according to Trellia Wealth Partners portfolio manager, Jonathan Ramsay.

Ramsay put forward his proposition in a presentation on ‘The unlikely haven — Why emerging markets may be the rational response to irrational prices’ at the 2026 IMAP Portfolio Management Conference in Melbourne, backed by 2026 market projections and consensus forecasts, he pointed to data that supports a high-growth outlook for emerging markets at significantly lower multiples than U.S. tech benchmarks.

“We believe emerging markets will account for nearly two-thirds of global growth in 2026, growing  about 3x faster than developed markets,” says Ramsay. “The MSCI Emerging Markets Index forward earnings per share (EPS) growth of 13.9 per cent compound annual growth rate rivals even the Nasdaq (at 14.9 per cent), but at half the valuation (11.3x vs 21.9x forward price earnings).”

This is supported by market data that shows emerging market equities offering 13-25 per cent forward EPS growth at 11-12x earnings.

Portfolio growth

According to Ramsay, along with the strong growth of emerging markets — like India, Taiwan, Korea, and China — domestically driven emerging market economies are also structurally less correlated with the U.S. cycle, which means emerging markets offer genuine diversification benefits and reduced risk within a portfolio.

“If an investor wants growth in their portfolio, much of that growth is probably going to have to come from emerging markets,” he says.

To support this assertion, Ramsay points to IMF World Economic Outlook estimates that show emerging market GDP growth for 2025 will be 65 per cent, compared to 35 per cent for developed markets. This rises in 2030 to 68 per cent, compared to developed markets dropping to 32 per cent. When compared to the beginning of the millennium, when GDP growth in developed markets was 63 per cent and emerging markets was 37 per cent, it’s clear that global GDP growth is occurring faster in emerging markets.

“So, for investors who want growth, maybe emerging markets are something they need to think about, if they want to reach their CPI+ objectives,” he says. “That’s because we no longer live in a world where the U.S. catches a cold and emerging markets get pneumonia. Emerging markets have become less volatile, and are perhaps more of a backwater than a lightening rod for risk.”

Ramsay adds the market is more confident overall about the growth coming from emerging markets and the resilience of it, compared to the concentrated growth happening in U.S. equities (Magnificent 7 and AI). Instead, emerging market equities enable investors to pay a lower multiple for higher expected growth on their investments.

True diversification benefits

For countries like Taiwan and India, Ramsay agrees emerging markets can provide true diversification in a portfolio, particularly as the world deglobalises. He says while historically, emerging market equities were high beta proxies for developed markets — rising and falling in lockstep with the S&P 500, offering investors with little ‘true’ diversification — this is no longer the case.

Today, emerging market economies are increasingly driven by domestic consumption, regional trade alliances, and distinct monetary policy cycles. Ramsay believes deglobalisation and supply-chain reshoring are creating structurally lower correlations between emerging markets and developed markets — and between individual emerging market countries themselves.

“Countries like India, Vietnam, Indonesia, and Brazil all have unique growth drivers, such as a growing middle class and structural reforms. This means for portfolios concentrated in U.S. and developed market equities, emerging markets now offer investors genuine portfolio-level risk reduction, alongside superior return prospects. It’s an asset class investors should reconsider.”

Earn CPD by reviewing the full presentation here.