Emerging market stocks and related exchange traded funds have been unloved over past couple of years as developed markets outperformed. However, some are shifting back to the more attractively valued developing countries.

Over the past five years, the Vanguard FTSE Emerging Markets ETF (NYSEArca: VWO) generated an average annual return of 0.7% and the iShares MSCI Emerging Markets ETF (NYSEArca: EEM) averaged a 0.3% decline. Meanwhile, the S&P 500 index averaged a 16.0% return. [Look to Emerging Market ETFs in the Second Half]

“It’s a fallacy to believe that EMs are on an escalator to DM status,” Richard Titherington of JPMorgan Asset Management told the Financial Times. “There are times when they will do better and times when they will do worse.”

Consequently, investors should look at the emerging market equities as a more cyclical asset. Currently, after years of outperformance in the developed markets, the emerging markets are beginning to show a lower premium to more developed countries.

“It’s too early to say that EM valuations have turned the corner but they are clearly at the low end of a historic range,” Titherington added. “Because it’s a cyclical asset class, you know the turn will happen at some point. You don’t buy EMs because they will emerge, you buy them because they are cheap.”