A rising number of strategists and asset managers predict that emerging markets will outperform in the next few years. But how much money should an investor allocate to this volatile group, and how best to participate? A good starting point is emerging markets’ portion of the world’s equity capitalization—about 13%. But because investors tend to have a home-country bias that prevents them from venturing too far abroad and some markets have lost value owing to falling currencies, the 13% figure may be on the low side, particularly when you consider some of the new or expanding members of the market.
