It was a kind of investing that was once horribly oversold and that burned many investors. But now emerging market (EM) investing, one of the dogs of investing since the end of the financial crisis in 2010, is sizzling and should continue its recent hot streak into next year, money managers said Monday.

Several managers at Blackrock’s i-Shares International Series Emerging Market ETF conference in Manhattan conceded that some investors got carried away and overweighted EM investing.

But managers said that many of the excesses in the 23 emerging markets had ended and EM markets are booming.

“It was a summer of love for investment in emerging markets,” according to the latest MSCI Research Spotlight. For example, Brazil, Taiwan, South Africa and India have all been big winners, MSCI said.

The MSCI Emerging Markets Index ended August up for the year 15 percent compared to a loss of 20 percent the prior year.

“We are seeing very strong performance,” Martin Small, head of U.S. i-Shares BlackRock, told the conference.

Emerging market equites “have outperformed the S&P so far this year by more than 800 basis points and the broader universe of developed markets by almost 1,000 basis points,” according to the October BlackRock report, “Is the Rally in Emerging Markets Sustainable?” The report said EM outperformance “is likely to continue into 2017.”

Which EM countries have the best prospects?

Taiwan, India, Thailand, Brazil and Indonesia, said Carlos Asilis, CIO and co-founder of Giovista Investments. He added that his firm is cautious on “the smokestack sector” of China.

South Korea and Malaysia should also be underweighted, BlackRock officials added in a report, which stated, “Korea is lagging on reform and Malayasia’s foundations are deteriorating.”

Nevertheless, while conceding that 2010 to 2013 was terrible for EM, the managers said the numbers now add up for the emerging market investor.
“Emerging markets are at an inflection point from a fundamental perspective, said Gerardo Rodriguez, portfolio manager for the Emerging Markets Group at BlackRock. “Fundamentals have improved for the most part.”

“We are seeing a much more benign environment,” he added. “The dollar is stable and oil prices have recovered.”

He said that this, combined with improvements in the Chinese economy, “have created a better environment for the asset class.”