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REUTERS SUMMIT-Emerging stocks rally can continue in 2018 - Aviva's Fitzgerald

Fitzgerald@

* Overweight EM stocks and local currency EM debt

* Tech sector multiples look "a little bit rich"

* Market underestimating faster Fed rate hike potential

* For other news from Reuters Global Investment Outlook Summit:

* http://www.reuters.com/summit/Investment18

LONDON, Nov 16 (Reuters) - Despite a stellar run in 2017, emerging-market equities can continue their rally next year, Aviva Investors told the Reuters Global Investment Outlook Summit on Thursday, adding that conversely, U.S. tech stocks looked a little rich.

Peter Fitzgerald, global head of multi-assets at Aviva Investors, who oversees 132 billion pounds ($174.20 billion) in assets, said that going long large-cap emerging equities and short on large-cap developed market stocks had done reasonably well in 2017, and would continue to make money next year.

MSCI's benchmark emerging stocks index is up around 30 percent year-to-date, making it the top-performing major asset class.

"We would caution people against thinking this can't continue a while longer," Fitzgerald said. "If you actually look on a three-year view, emerging markets are only up around 10 percent, and on a five-year view they're up around 12 percent."

He is also overweight local currency emerging debt and has a small allocation to the Turkish lira, which has come under sustained selling pressure in recent weeks.

"Is Turkey a great story? No, but then you have to say what are the yields available for a small percentage of my portfolio? So we think there are some opportunities in there," he said.

In comparison, he was cautious on U.S. technology stocks, noting that investing in a company like Amazon, from a valuation perspective, was challenging.

"I lived through the 1999 tech bubble, so maybe I'm partially scarred by that experience, and struggle to take big long positions in some of these tech businesses that have very high multiples," he said. "We think it's got a little bit rich."

However, he is holding short positions in businesses that are being disrupted by digital competitors, including retail names and brick-and-mortar gambling houses.

Fitzgerald also said that the U.S. bond markets are not pricing in enough potential Fed rate hikes into the curve.

"(Markets) are saying broadly that we expect the Fed to raise rates two, maybe three times between now and 2020. And we think that is underestimating the potential for the Fed to raise rates at a faster pace," he said.

He pointed out that global growth was picking up with some signs of inflation reappearing - or at least a pricing out of deflation -- but bond markets were still effectively in deflationary mode.

He acknowledged that a faster pick up in U.S. inflation and rate expectations could hurt emerging markets, but argued that some were less susceptible to U.S. rate rises than in the past.

"Currencies are not explicitly pegged to the dollar and an increasing percentage of the debt is in local currency," he said.

Other positions:

* Overweight equities versus fixed income

* Likes European small/mid-caps and European financials

* Shorting auto stocks, sector going through huge disruption Follow Reuters Summits on Twitter zReuterstSummits ($1 = 0.7577 pounds) (Additional reporting by Helen Reid, editing by Larry King)