Welcome to Thoughts in the Market. I'm Andrew Sheets, Chief Cross Asset Strategyist for Morgan Stanley.

Along with my colleagues bringing a variety of perspectives, I'll be talking about trends across the global investment landscape and how we put those ideas together.

It's Friday, November 27th at 2 p.m. in London.

We hope everybody has had a good Thanksgiving.

Recently on this program, we've been discussing Morgan Stanley's outlook for the year

ahead. Overall it's a positive story as we expect political and public health

uncertainty to fall, global growth to exceed expectations and equity and credit markets to post above average returns.

But as we've been discussing this outlook with investors, there's been a great deal of focus on one asset class in particular,

emerging markets, or EM for short.

Emerging market equities have trailed the S&P 500 by an average of about 10% per year since 2010,

while a basket of emerging market currencies has lost about half of their value against the US dollar over the same period.

On the surface, 2021 would seem to offer redemption.

Our economists are forecasting a synchronized global upswing across developed and emerging economies.

And recent news on the new vaccine developed in concert with Oxford University should be good news for EM countries,

which are likely to rely on this vaccine more than others.

Overall, Morgan Stanley's forecasts do see this as a positive year for EM returns,

with the EM stocks gaining around 6% through the end of the year.

But while we see this as a positive year for EM,

the market story has some important nuance.

That roughly 6% gain for EM equities is less

than what we see for stocks in the US, Europe, and Japan, partly because the EM Index has become

more exposed to large technology firms and less exposed to companies and countries at the center

...