For years, record-low interest rates and a surge in passive investing have helped high-growth U.S. stocks – especially those of technology companies like Facebook, Microsoft or Alphabet (Google) – outperform equities in cyclical sectors, which are more sensitive to the economy’s health, as well as stocks from other geographies. And the Covid-19 pandemic only widened this performance gap. But in the last few months, many investors have begun rotating away from these high-priced stocks toward equities with the potential for both returns and reduced risk. We believe emerging markets offer great potential value.