T?he case for investing in emerging markets seems beguilingly simple. They are growing and urbanising fast. They have young populations who aspire to consume as we do in the west. They generally have sound public finances, with no bloated welfare states or dependency cultures. So companies that are active in those markets should be able to increase profits and dividends rapidly, and their share prices should reflect that.

But all too often, it doesn’t work that way. Emerging markets suffered a savage sell-off when Federal Reserve chairman Ben Bernanke said in late May that the central bank’s programme of bond purchases might be reduced later in the year, provided the US economy continues to improve. The MSCI Emerging Markets index, which measures the performance of the more advanced developing-economy stock markets, is down almost 10 per cent year to date. By contrast, the FTSE All-Share index is up by 12.6 per cent, despite the UK’s anaemic growth.

Explaining the most recent sell-off is fairly easy. “When the Fed talked about withdrawing liquidity, Americans withdrew their money from other markets,” says Jane Sydenham, chief investment officer at Rathbones, the wealth manager. According to EPFR Global, a data provider, emerging market equity funds worldwide saw outflows of $3.4bn in the week ending June 19, while debt funds shed $2.6bn.