Small cap emerging market stocks have corrected by 10% to 15% since their mid-January peak (depending on the index), but have since found support just above their 200-day moving averages. Fundamentally, we are bullish on emerging markets given their growing clout in the global economy (they are on track to surpass developed markets in GDP over the next few years), their generally more fiscally responsible government and their competitive trade positions. While predominantly export oriented, we believe emerging markets will likely transition towards consumption-based growth as more and more citizens join an already burgeoning middle class. As this transition occurs, we think small-cap emerging market stocks will increasingly benefit from their greater sensitivity to consumer demand within their own countries. With small-cap emerging market stocks finding technical support and weighed against their long term opportunity, we think the risk-reward is currently sufficient to initiate exposure.

David Fuller's view I agree. I think subscribers will be interested in the graphic and comments comparing the S&P 500 with the Dow Jones-UBS Commodity Index.