Investors are increasingly disillusioned with extreme monetary policies, the pace of economic growth and the performance of equities in developed markets.
In virtually every country where central banks have moved interest rates into negative territory, equities have suffered.
The most dramatic example is Japan’s Topix index, which is down over 15 per cent this year.
At the same time, cheap funding is not enticing companies in developed economies to invest.
Capex in developed economies is currently contracting at an estimated 3 per cent rate, according to data from JPMorgan.
Emerging markets have, of late, performed better on a relative basis — both measured by economic growth and asset prices.
EM shares have registered a far more respectable showing than developed markets.
Indeed, so far this year, EM bonds and equities are four of the top six performers globally.
There is concern that the recent gains are merely the product of central bank largesse in several developed economies.
Indeed, the best performance has come from some of the hardest hit markets — Brazil and Russia among them.
The Turkish lira, for example, dropped over 7 per cent in the wake of the attempted coup but has since recovered more than half those losses.
Both the recent data and the outlook for economic prospects in emerging markets for the next few months look attractive, especially in east Asia.