A divergent war of returns has broken out between two similar asset classes. On one side are emerging market stocks, which have been careening lower for nearly two years now. On the other side are emerging market bonds, which have been holding steady if not pushing higher over this same time period. Such a wide divergence between these two asset classes is uncommon over long-term periods of time, as the forces driving the performance of emerging market stocks are often similar to those impacting the health of emerging market sovereigns and the ability to service their debts. So who among the two categories will win in the end?
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