As the S&P 500 continues to hold investors’ attention with its steady climb, BloombergGadfly’s Nir Kaissar shares his perspective on how and why emerging markets might deserve some attention.

Kaissar points out that emerging market stocks have recently outperformed the S&P 500, a sharp reversal from recent years. The MSCI Emerging Markets Index is up 14.8% this year (through August) compared to 7.8% for the S&P. There are signs, he says, that U.S. investors are concerned about stretched valuations, as shares in what have traditionally been considered defensive sectors (consumer staples and utilities) are currently more expensive than those in the more volatile sectors (financials and technology).

“Investors appear to be making a shrewd bet that it’s time for emerging markets to shine again,” Kaissar concludes, adding, “And if they’re right, the recent gains in emerging markets could just be the beginning.”