Emerging markets: ‘Unambiguously cheap’?

This has not been a vintage year for emerging markets.

The once all-conquering BRICs look in disarray. Brazil and India have seen inflation soar and the value of the real and rupee decimated, Russia is suffering from slowing demand for its exports, and even mighty China's growth is sputtering.

(Read more: Why emerging markets could be starting long bear market)

Yet optimism about a rebound is building, despite a stronger headwind from the dollar and a slowdown in some countries' growth.

Emerging markets are "unambiguously cheap" right now, according to Russ Koesterich,global chief investment strategist, BlackRock.

"We will see some better performance"," he said.

"The issues there are real. The question for investors is how much is this reflected in price? EM currently trading at about a 35 percent discount to developed markets. Historically, that's been a good entry point."

There could also be opportunities as emerging markets become more realistically priced.

"If you go back 18 months or a year or so, there was thisfeeling that emerging markets were the only place to be," according to NickCarn, founder , Carn Macro Advisors.

"Now, a lot of the pixie dust has been blown off that story,valuations have come down and it's not quite the overinflated expectations thatthey were. That changes the risk/return dynamics of the market."

There are four key markers which could signal a turnaround,according to Koesterich. One is more stable gross domestic product (GDP) growth figures and a more sustainable composition of GDP. A more stable inflation picture, less "bubbly" asset price movements and less reliance on short-term capital funding from abroad could also point to a changing tide, he argued.

(Read more: Why Larry Summers could be next big emerging markets risk)

The bond markets have looked particularly overheated to some investors. Koesterich said it is "hard to find bargains" in government bonds.

The key is to differentiate between levels of debt,according to Kevin Adams, head of institutional fixed Income, Henderson Global Investors:

"At the moment they're kind of scary, but that's going to throw up opportunities in some of the better debt markets, the ones where they have a current account surplus,which are being sold off willy-nilly," he said.

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