Overall, this analysis does not invalidate the strategic case for allocating
to emerging markets in a global equity portfolio. However, we caution
investors from significantly overweighting emerging markets based
solely on the widely held view that emerging economies will grow
faster than developed markets because we believe the foundation for
that argument is weak. A useful analogy is growth stocks, which have
generally exhibited faster sales and earnings growth when compared
to value stocks, yet have failed to outperform value stocks over long
holding periods.