The Vanguard FTSE Emerging Markets ETF (NYSEArca: VWO) and the iShares MSCI Emerging Markets ETF (NYSEArca: EEM), the two largest emerging markets exchange traded funds by assets, are going to finish 2015 in the red, extending a multi-year losing streak while lagging developed markets stocks once again.

After years of weakness, the MSCI Emerging Markets Index is now trading at 12.8 times 10-year average earnings as of the end of September, compared to the previous low of 13.5 times during the 1997-98 Asian financial crisis and much lower than its long-term average of 25 times average 10-year earnings.

Some fund managers believe it will be a while before emerging markets stocks recover in earnest. Investors pulled out of riskier emerging markets as data showed growth from China’s economy slowed, commodity prices fell and the Federal Reserve signaled an interest rate hike this year. The China slowdown is fueling the lower commodity prices and lower outlook for other major emerging economies. Moreover, rising borrowing costs, a stronger dollar and rising corporate debt loads, with the International Monetary Fund warning of corporate defaults, are adding to volatility. [Area Emerging Market ETF Investors Must Monitor]

“Stocks in emerging markets have been sold down so hard for so long — the managers surveyed by Merrill were more underweight in them than anything else — that they trade at extremely deep discounts to their counterparts in mature economies,” reports Conrad de Anelle for MarketWatch.

In October, a monthly fund manager survey from Bank of America Merrill Lynch, exposure to emerging market stocks remained at a record low, reports Dhara Ranasinghe for CNBC. Earlier this year, Barclays forecast better growth prospects in the developing economies, projecting a 12% earnings growth in emerging markets, compared to a 7% earnings growth in the U.S.

However, Barclays warned that investors should not treat all emerging countries equally. For instance, Brazil, which Barclays expects to bottom out soon, is in a correction, along with Greece, Russia and China.

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