The rally that has almost erased this year’s decline in emerging-market assets probably won’t last as economic growth remains sluggish, according to Bhanu Baweja, a strategist at UBS AG, who correctly predicted the selloff in 2015.

“Leading indicators don’t point to a major inflection point,” Baweja, the head of emerging-market cross-asset strategy at UBS, wrote in an e-mailed research note Tuesday. While the pace at which developing-nation economies are weakening has moderated, it’s “more likely than not that we trudge along the bottom for a while rather than see a significant pick-up in growth,” he said.

Weak global trade, high debt levels and deterioration in governments’ balance sheets suggest that emerging-market stocks may trail their developed-nation peers by as much as 15 percent over the next two years, Baweja said.

The warning comes after the MSCI Emerging Markets Index rebounded more than 15 percent from this year’s low as commodity prices stabilized and China stepped up economic stimulus. His view clashes with bullish money managers including BlackRock Inc. and Franklin Templeton. Research Affiliates LLC, an adviser to Pacific Investment Management Co., predicted that developing- nation assets could become the next “trade of a decade” after years of underperformance.

2015 Forecast

Baweja pointed out that global trade has structurally weakened, suggesting any “big rebound” will be elusive in industrial production or exports, the two key ingredients for developing-nation corporate earnings. The ratio of growth in global trade volumes to gross domestic product expansion has declined to 1.07 in the post-financial crisis periods, from 1.6 in the 2000s and 2.2 in the 1990s, he said.

In his 2015 outlook, Baweja’s team warned about a potential decline in emerging-market currencies as developing nations lack a “Plan B” for growth, a prediction that proved prescient. His top call for 2016 includes a bet that the Mexican peso will weaken, which foreshadowed the currency’s 4 percent drop this year.

In Tuesday’s note, Baweja said concern about emerging markets has morphed from weaker incomes to a rise of capital costs. As government balance sheets weakens, the financing costs for companies will rise. That suggests developing-nation stocks will continue underperforming developed markets for the next one to two years.

“We see little reason for a big improvement in return on equity in EM,” he said.