Halfway through the year, as commodity prices soared and stockmarkets plunged, it looked as if emerging-market stocks might do something they had managed only once in the past decade: to beat the returns of American ones. Two months on and the hope is gone. A small bounce in rich-world share prices means emerging-market underperformance will probably continue.
America’s interest-rate rises—and the expectation of more to come this year—have not helped emerging-market economies, especially those with large import bills and dollar-denominated debts. Over the past decade, though, the performance of the dollar has been mixed and interest rates low. In the same period, the msci em index has returned just 2.9% a year, against 9.5% for rich-world stocks.
