Chief investment officer for APAC at Deutsche Asset Management, Sean Taylor, told CNBC's "Street Signs" that optimism is here to stay when it comes to emerging markets — at least for the next three years.
Emerging markets have performed well and remain an enticing, and under-owned, owned asset class despite their strong earnings and attractive valuations, a major asset manager said earlier this week.
"We've actually seen quite a decent synchronized global recovery, particularly in trade coming through. If that is sustainable, EM is in a very good position particularly, if some of the bottom-up reforms continue," Taylor said.
"In the debt space, we're very selective. We prefer hard currency. In equities, we prefer Asia over Latin America and EMEA. Within Asia we are overweight China and Korea, neutral on Taiwan and India," he added.
Brazil's Bovespa has risen nearly 14 percent year to date. One of the top performers for 2016, Indonesia's benchmark Jakarta composite, is also up nearly 7 percent.
Due to the rise in interest rates in the U.S., investors need to look overseas to generate returns. Thus, the average emerging market ETF is up about 5 percent so far this year, overtaking even the best performing U.S. treasury ETFs.
"We would absolutely recommend emerging markets and emerging market local debt," Jonathan Xiong, head of fixed income alternatives at Goldman Sachs Asset Management, told CNBC.
According to Xiong, bond markets in the U.S. and Europe do not offer substantial liquidity premiums, making emerging markets especially appealing.
Read more at CNBC.