Robust economic growth, a soft dollar and subdued borrowing costs helped emerging stocks race towards the 2017 finishing line on Friday as the year's best performing asset class, while many currencies also looked back on solid gains.
MSCI's emerging equity benchmark rose 0.4 percent on the year's last trading day, having added 34 percent since January—their best annual performance since 2009. Most gains came from Asia, where MSCI China has soared 50 percent and Korea jumped 43 percent.
Emerging markets have benefited from the dollar shedding more than 9 percent this year against major currencies despite the U.S. Federal Reserve delivering three rate hikes. The greenback is set for its biggest annual loss since 2003.
Tame U.S. Treasuries also lifted local currency and dollar debt, which returned 15 percent and 9 percent respectively.
And with commodities--from coal to copper to crude--having reaped bumper gains, the stars seemed aligned for emerging markets in 2017.
Many doubt 2018 can bring a repeat performance.
"We have seen a rebound in emerging market growth since mid-2016 and that's after six years of negative trend," said Polina Kurdyavko, co-head of emerging debt at BlueBay Asset Management.
"Valuations on a relative basis look attractive versus developed markets, but it's difficult to expect double-digit or high single-digit returns on index levels, based on where spreads are today, unless we see a reversal in Treasuries which is not our base case."
The softer dollar also brought cheer to currencies. Overall, JPMorgan's ELMI+ index shows an 11 percent gain this year - the most since 2009.
Focus was on South Africa's rand, which strengthened 0.5 percent as the Supreme Court ruled parliament had failed to hold President Jacob Zuma to account over a scandal related to state-funded upgrades to his home, and must launch proceedings that could remove him from office.