The iShares MSCI Emerging Markets ETF (EEM) - Get Report  is up 9% sofar in 2016, outpacing the S&P 500's gain of 2.6%. That's why Mark Hamilton, chief investment officer for the multi-asset group at OppenheimerFunds, is raising his fund's exposure to emerging markets -- he expects the outperformance to continue.

"You still have structural problems in China. You still have a long-term decline in the rate of growth there, but we are seeing a near-term pickup in growth there," said Hamilton. "Combine that with relative valuations being attractive in emerging markets and that leads to a pretty attractive combination."

A dovish Federal Reserve is also on the side of emerging market investors. Hamilton said the Fed has repeatedly backed off its plans to hike interest rates whenever volatility spikes in the stock market. "My guess would be they are going to try and hike at least a couple of times this year, but you will have to see how markets react to see how far they get with that," said Hamilton.

Commodity prices, especially the precious metals, have come back in 2016. Or, in the case of oil, have at least stabilized. This has helped emerging market stocks since many of these regions rely heavily on drilling and mining activities. Still, Hamilton said he is not increasing his commodity exposure in order to lessen the volatility in his portfolio.

Hamilton is also increasing his fund's exposure to high-yield bonds thanks to the more accommodative Federal Reserve, stabilizing energy market and cheaper valuations relative to equities.

Speaking of domestic equities, Hamilton said he expects moderate returns from stocks, but nothing thrilling. "We are in an environment where we are at or beyond the peak of the cycle in terms of economic growth," said Hamilton. "Typically that's a point where stocks offer mediocre returns relative to their risks."