Indian equities are trading at about 30 per cent premium to emerging markets, Conway estimated, and the country faces a number of economic and fiscal risks.
Schroders is staying defensive, on guard over fallout from what Conway calls the "old, tired economies."
"While you need to be ahead of the curve, you don't want to be standing in front of a running train," said Conway, who has been with Schroders since 2004 after previously heading global emerging markets for West LB Asset Management.
Schroders, which has $21 billion invested in emerging market equities, says markets are expecting an orderly Greek default with firewalls, and sees only a 10 percent probability of a break up of the currency block.
Still, the euro zone uncertainty is masking what would be attractive investment opportunities in emerging markets, Conway said.
"Fundamentals across the world for emerging is very, very positive: Good economic growth, strong fiscal, strong current account, high reserves, undervalued currencies, no stresses in the financial sector like you have in the developed world and valuations are very, very cheap," he said.
"So, I'd say to you today, 40-50 per cent returns in the next 12 months if the world consisted of only emerging countries. Unfortunately the world doesn't."
Emerging equities have underperformed developed markets this year. The MSCI emerging index is down 0.3 percent compared with a nearly 1 per cent rise in the MSCI world equity index.
Schroders estimates the 12-month price-to-earnings ratio for emerging markets stands at an average of 9.2-9.3 times, with South Korea at about 8.3-8.4 times and China at 10 times.
By contrast, India, in which Schroders has invested $1 billion, is trading at 12.2 times, he estimated.
"The macro position for China and Korea is infinitely better than India. It does have inflation issues, it still has record fiscal position and has one of the highest interest rates in emerging markets. And, in addition, valuations are expensive."
India's growth slumped to a nine-year low of 5.3 per cent in the first quarter of calendar 2012 and industrial output this week showed growth was flat in April.
But Conway saw pockets of opportunities in domestic-focused companies such as consumer durables in India.
"Medium- to long-term you have to be extremely positive. The issue is India should be stronger but it needs the right management," Conway said.
Copyright @ Thomson Reuters 2012