Emerging market stocks and currencies have been the “big short” for many professional investors for several years now. But for selective investors with some risk appetite, the asset class is definitely worth a look.

The slowdown in China’s economy remains a reality, but growth is only set to slip from an annualised pace of 6.5 per cent this year to 6.3 per cent in 2017. Compared with more developed nations, China’s overall economic health remains intact.

India remains buoyant. Economists expect India’s GDP to increase by 7.5 per cent this year, and 7.7 per cent in 2017, making the country the world’s fastest-growing large economy.

India is not overly dependent on commodity production — or on China. With a growing consumer economy, growth has been stymied by bureaucracy and corruption. But there are signs of change.

Prime minister Narendra Modi has closed a loophole that allowed wealthy Indians and foreign investors in the country from routing investments through Mauritius to escape taxation. Meanwhile, India’s central bank has stabilised the rupee, brought inflation to heel and begun tackling bad loans by banks.

India’s main stock market, the BSE Sensex, is valued at 20 times forward-earnings, fair value for non-Chinese Asian markets and lower than the ASX in Sydney, which trades at 25 times. Investors seeking greater value should look to India.

Naomi Rovnick is digital and communities editor of FT Money

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