Research Affiliates founder Rob Arnott said he has loaded more than half of his liquid investments into emerging markets value stocks, and that the bet is paying off big. This according to a recent article in Bloomberg.

“EM value is cheap enough that I think it’s got a long way to run,” says Arnott, who said his firm’s models imply returns that could “double one’s money in five years.” The Pimco fund that Arnott helps manage earned 24% in 2021, outperforming 99% of its peers (according to Bloomberg data)—a significant turnaround from early 2020 when, the article reports, “some of his funds were among the hardest hit during the initial states of the Covid-19 pandemic.”

The article reports that emerging-market value stocks, “which trade at low prices relative to their fundamentals, trailed growth peers in the initial rebound from the pandemic low but are rallying faster than them in 2021.” It adds, “as the global economic recovery gains pace, value bulls are betting there’s more to come, as the investment style tends to benefit from faster inflation.”

Research Affiliates reportedly forecasts a real annual return of 5.3% for emerging-market equities over the next ten years. He notes that backing EM hasn’t always been a winning formula but that he’s turned more bullish over the past few years.