Outlook for Emerging Markets is improving

Emerging markets are rebounding strongly in 2016 after an especially rough 2015.

The MSCI Emerging Markets Index shows a 9 per cent gain in the last three months, a 1.58 per cent gain on the year so far. This is in stark contrast to the 21.6 per cent decline in 2015.

Recent gains are mostly due to strengthening commodity prices, especially crude oil. This revival of commodities is of particular importance as many emerging market countries produce and export natural resources such as crude oil and others.

Another factor driving recent gains is the hands-off approach of the US Federal Reserve on raising interest rates, which has led to a softer dollar.