Context is everything when picking winners. Whether it's a horse race, auto sales figures, or the performance of a particular stock, almost everyone can claim "we're number one" by some measure. Right now, the undisputed leader of the pack in the investment world is the emerging markets (EEM), which have soared in September after trailing for the past three years.
"Emerging markets are leveraged plays on global growth and global growth is picking up," says Bob Doll, chief equity strategist at Nuveen Asset Management in the attached video.
While the 8% gain so far in September is "a good start," he concedes it's going to take "a whale of a rally" for the emerging markets to catch up to the U.S. equity benchmarks for the year, and make good on a prediction he made back in January that the emerging markets would outperform developed markets.
"Europe is becoming less bad, china is stabilizing, [and] the U.S. is doing pretty well," he says, "and when you put it all together you get an uptick in global growth and there's no better way to play it" than the emerging markets.
To be clear, the U.S. itself is off to a great start in September, which is normally a treacherous month for stocks. But several other foreign markets are conspicuously doing even better in the short-term, namely Spain, Italy, India, and Shanghai.
"Some are asking if this is a back from the dead rally," Doll says, admitting that could be part of the reason for the renewed interest. "I think we are still getting less bad news out of Europe" where he expects to see an "anemic recovery," but a recovery nonetheless.
For some, the preferred play on global growth is to capture it via U.S.-based multinationals rather than diving head first into places like China, South Africa or Mexico, but from Doll's perspective, it's best "to do some of both."
More from Breakout: