Emerging markets have struggled since the US revealed plans for the ‘tapering’ of its quantitative easing programme last year, as many emerging markets had benefited from inward investment as a direct result of the looser monetary policy.
Just over a year ago former Federal Reserve chairman Ben Bernanke signalled in his testimony to the Joint Economic Committee that it would to scale back asset purchases, with the bank finally moving reduce the programme by $10bn from January of this year.
The policy may have been domestically driven, but the scale on which the stimulus had be routed to Asia was revealed by the sell off that followed the comments - before any tapering had even taken place.
From May 2013 to the end of the year the MSCI Emerging Markets index saw a drop of 11.72 per cent, having previously recorded gains of 8.22 per cent in the first five months of the year, according to FE Analytics.
Markets have been more benign since the policy was brought into action, the effects having by now been priced in, but growth remains sluggish as emerging markets broadly continue to lag larger developed peers.
The MSCI Emerging markets index has largely been in negative territory since the turn of the year, in January alone losing roughly 7 per cent. However, the tide seems to be turning with the index currently in positive territory for the year to date to May 30 with a return of 3.53 per cent.
But with such a diverse region the overall index performance does not necessarily show the whole picture and in particular which countries are performing better or worse than the others, particularly with so many macro events taking place in these markets.
In short: tapering was the headline issue last year, but there is now a variety of trends across the main emerging markets.
The most obvious example is Russia. One of the core Bric countries, it is nevertheless had a difficult time compared to its better performing peers China and India.
In 2014 the situation has been made more volatile with the situation in Ukraine, especially following the sanctions that have been imposed in the wake of the annexation of Crimea.
Russian GDP growth at 0.9 per cent in the first quarter of 2014 is down significantly from the 2 per cent recorded in the last quarter of 2013. The economy could grow as little as 0.5 per cent this year, Prime Minister Dmitry Medvedev has admitted.
And the fallout from the Ukraine crisis has hit stockmarket performance, with even a strong rally over the past month leaving the MSCI Russia index 9.51 per cent down for the year so far to 30 May. This compares to the MSCI India return of 15.79 per cent, the MSCI Brazil index return of 6.94 per cent, and the smaller MSCI China index loss of 4.93 per cent.
For the five years to May 2014 the MSCI Russia index has delivered a disappointing 15.8 per cent, while for a three-year period it recorded a loss of 23.51 per cent. The only market to deliver worse returns was the MSCI Brazil index.