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Brighter Days Ahead for Emerging Markets?

Morningstar experts give their outlooks for this beaten-down segment of the market.

Note: This article is part of Morningstar's December 2013 Emerging-Markets Week special report. An earlier version of this article appeared Sept. 25, 2013.

Let's take a flashback to January. If you had told a room full of investors then that between U.S. stocks and emerging-markets stocks one group would be in negative territory near year's end while the other would be up nearly 30%, a majority might well have guessed it would be U.S. equities that would be stuck in the doldrums. After all, the fiscal cliff, the budget sequester, and other issues were casting a pall over our economy at that time, while many assumed emerging markets would continue rolling along. Fast-forward to now and the reverse is true. U.S. stocks have sustained their rally while emerging markets have languished.