Consultants and academics are warning against diving too deeply into emerging markets equity.

Rogerscasey Inc., however, is projecting outperformance of 3.1 percentage points, up from 2.8 percentage points in 2009. That widening gap was caused by a lower outlook for developed markets; the firm’s outlook for emerging markets held steady.

“That does not mean we won't have bumps in the road (in emerging markets equity returns), but we think fundamental growth and domestic demand will lead to better stability for many of the emerging markets over the next decade,” Cynthia Steer, chief research strategist at Rogerscasey, Darien, Conn., wrote in an e-mail response to questions.

P&I Online, March 2010