The world’s largest money managers may be underestimating the durability of inflation after a record wave of money printing to combat the Covid-19 pandemic, according to veteran investor Mark Mobius.

This will pose a particular problem in the U.S., where a rising inflation rate will weigh on the global reserve currency, said Mobius, who set up Mobius Capital Partners after three decades at Franklin Templeton Investments. At the same time, the quickening price growth is likely to support a rally in raw materials, even as the Bloomberg Commodity Index already hovers near its highest since July 2015, he said.

Such a backdrop favors emerging markets, which will grow faster than their developed-nation peers in the years ahead, Mobius said. Chinese and Indian equities, recently beaten down by a rout in technology shares as well as the latest Covid-19 crisis, look particularly attractive, he said on Bloomberg TV. Yet he voiced caution about fully rotating into value stocks.

“With continuing low interest rates, normal parameters like P/E ratios aren’t a good guide for where you should be,” Mobius said from Cairo. “The numbers to look at are return on capital and dividend yield. But I think you have to have a combination of value and growth.”

His concerns on inflation were underscored Tuesday by new data showing a surge in Chinese factory-gate prices. Even so, central bankers from the U.S. and elsewhere maintain that price gains are temporary. In China, the world’s largest exporter, policy makers insist that price growth remains mostly under control. Still, officials have pledged to strengthen controls on the raw-materials market to limit costs to companies.

This article was provided by Bloomberg News.