Core Viewpoint - Fund managers are optimistic that emerging market assets will outperform developed market assets over the next year, driven by favorable monetary policies and conservative fiscal measures in emerging markets [1][4]. Group 1: Market Performance - Emerging market stocks are expected to rise by approximately 15% in the next 12 months, compared to a 10% increase for developed market indices [1]. - Since April 2, when President Trump announced tariffs, both MSCI emerging market index and its developed market counterpart have increased by about 14% [4]. - The inflow of funds into emerging market ETFs has been robust, with approximately $5.8 billion injected into iShares Core MSCI Emerging Markets ETF, representing 5.8% of its total assets, while Vanguard FTSE Developed Markets ETF saw $5.6 billion, or 3.3% of its total assets [4]. Group 2: Monetary and Fiscal Policies - The Federal Reserve's potential for further easing is expected to benefit emerging market assets, as indicated by Chairman Powell's hints at possible rate cuts [6]. - Emerging market policymakers are currently more conservative and pragmatic, avoiding unsustainable fiscal deficits seen in developed markets [5]. Group 3: Valuation and Inflation - Emerging markets are viewed as having more attractive valuations compared to developed markets, with higher earnings growth prospects [7]. - The average inflation surprise index for emerging markets is at -19 this year, indicating lower-than-expected inflation, which is favorable for emerging market bonds [7].