Emerging markets lag

Emerging markets are supposed to provide higher returns at the cost of higher risks. The returns in recent years, however, have not been at all impressive.

From Bloomberg:

The numbers are certainly sobering. All told, developing-nation currencies have fallen to their lowest levels since 1999, and bonds denominated in those currencies have wiped out five years’ worth of gains.

Meantime, in the stock market, the emerging world and developed one are diverging sharply. Since 2009, the MSCI index has fallen 10 percent while developed markets have soared about 50 percent. Based on estimated price-to-earnings ratios, the emerging markets are trading at their biggest discount to developed ones since 2006 -- 31 percent.