The tectonic plates of international equity markets are shifting. Emerging markets may have ended a decade-long secular re-evaluation and the ridiculous Bric trade appears to be dead.

After the 2000 dotcom crash, emerging equity markets strongly outperformed developed ones (with a brief, dramatic interruption after the collapse of Lehman Brothers as over-leveraged investors scrambled for cover). But since October, the emerging markets have underperformed by 12 per cent, according to MSCI – even though world stocks have been rising.

Why? The hype was about growth, but much of emerging markets’ long rise was driven by valuation. After 9/11, they traded at less than half the price/earnings multiple of the developed world. By the eve of the credit crisis in 2007, they were at a premium of 10 per cent. The latest underperformance took them from parity to a 10 per cent discount – probably enough to account for their greater inflation problems.