Emerging markets and value stocks trade at one of the two or three lowest relative valuation points in history compared to the U.S.

Judged as of 28 July 2025. There are two parts: (a) emerging-market equities relative to U.S. equities and (b) value stocks relative to the U.S. or growth market. Each must sit at or near one of the two or three cheapest relative-valuation readings in the available history, measured by standard relative metrics (for example relative P/E, CAPE or price-to-book of MSCI EM vs MSCI USA, and the value-vs-growth or value-vs-market valuation spread). TRUE: credible valuation data show both relative valuations among the lowest roughly three episodes, or in the bottom few percent, of their recorded history. MOSTLY TRUE: both are at or near historic relative lows, but one ranks slightly outside the bottom two or three (for example fourth or fifth lowest). MIXED: only one of the two meets the test. MOSTLY FALSE: both are cheap relative to history (for example in the bottom quintile) but clearly not among the two or three lowest points. FALSE: neither is unusually cheap in relative terms.

Set before the research began.

1. E1 Emerging Markets in a World Beyond US Exceptionalism | MSCI MSCI · 1 June 2025

   “As of May 30, 2025, U.S. equities were trading at over 21 times forward earnings, compared to 12 times for EM equities — one of the widest valuation spreads in the last two decades.”

2. E2 Why Value Stocks Matter in 2025 American Century Investments · 5 May 2025

   “The valuation gap between value and growth has grown to near 20-year highs”

3. E3 Hope Springs Eternal — Verdad Verdad · 16 March 2026

   “Yet with the rise of Big Tech in the 2010s, this valuation spread has now widened to historically extreme levels, with value stocks trading at 10 cents on the dollar relative to growth stocks today.”

4. E4 2025 – The Emerging Markets Investor The Emerging Markets Investor · 11 July 2025

   “The valuation premium of the S&P 500 over the MSCI EM Index closed the quarter at elevated levels, surpassed only by the 2016–2018 and 1998–1999 periods.”

5. E5 The Case for EM Value | Insights | Pzena Pzena Investment Management · 17 February 2026

   “Aside from the post-pandemic digital economy boom, which saw US tech valuations explode, EM stocks’ discount to their developed market peers hasn’t been this material since 2005, immediately preceding close to a decade of outperformance for emerging markets.”

6. E6 EM gains but discount to developed markets deepens MSCI · 9 March 2026

   “the forward price-to-earnings (P/E) ratio of the MSCI Emerging Markets Index relative to the MSCI World Index continued to fall through 2025 ending the year near its widest discount since 2003.”

7. E7 Value from the Ground Up: Brandes Investment Partners · 25 September 2025

   “As of June 30, 2025, value stocks traded at historically low valuation levels compared to growth stocks—across both the MSCI World and MSCI EAFE indexes.”

For emerging markets, E4 says the S&P 500's valuation premium over MSCI EM in mid-2025 was surpassed only by the 2016–2018 and 1998–1999 periods. That puts it at roughly the third-lowest relative point in the periods E4 covers; E1 describes one of the widest spreads in two decades as of May 2025, and E6 reports a discount to MSCI World near its widest since 2003 at the end of 2025, after the judgment date. For value stocks, E2, E7 and E3 describe the value-growth valuation gap as near 20-year highs, historically low or historically extreme. None of them ranks the mid-2025 reading among the two or three most extreme in the full history. Both parts are at or near historic relative lows, but the value part's ranking is not shown to be in the bottom two or three.