π Franklin Templeton: Why Now for Emerging Markets
MSCI Emerging Markets trades at ~10x forward earnings vs ~18x for the S&P 500 β one of the widest valuation gaps in years.
β’ EM equities sit near a 45% discount to developed markets on price-to-book, a gap Franklin Templeton says isn't justified by relative profitability.
β’ A weakening US dollar is seen as a tailwind for EM equities and debt in 2026.
β’ The firm's Institute expects a broader lift in non-US equities as valuations improve and earnings momentum builds.
π‘ Why it matters: Cheap EM valuations plus a softer dollar make a classic reallocation setup β worth watching alongside the broader 2026 case for diversifying away from US mega-cap concentration.
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