What’s Working In Emerging Markets Based On Graham, Greenblatt

Last week, iShares MSCI Emerging Markets Indx (ETF)(NYSEARCA:EEM), the most actively traded ETF focused on emerging markets, received an order worth $1.6B – its largest single order ever.

Investors are zooming in on battered emerging market stocks that are offering highly cheap valuations said to be out of sync with their fundamentals. The U-turn in their psyche is starkly apparent from the fact that whereas they withdrew over $58 billion from emerging markets during the first quarter of this year, they pumped in $4.7 billion into emerging market stock and debt funds during the week ended April 9, according to statistics from the Financial Times, quoting data provider EPFR.

The chart below shows that over the past few days, the...