Emerging markets: Valuations and returns GTM –UK | 55 MSCI Emerging Markets Index: Price-to-book ratio MSCI Emerging Markets Index: Price-to-book and returns x, multiple Price-to-book ratio and next 5-year annualised % price return* 3.00 60 Current level 2.75 50 +2.0 std. dev. 2.50 40 2.25 s 30 e 2.00 i t i u 20 Eq 1.75 Average: 1.79x 10 1.50 1.25 31 Dec 2016: 0 1.51x 1.00 -10 -2.0 std. dev. 0.75 -20 '97 '99 '01 '03 '05 '07 '09 '11 '13 '15 0.75 1.25 1.75 2.25 2.75 3.25 Source: (All charts) FactSet, MSCI, J.P. Morgan Asset Management. *Dots represent monthly data points January 1997 through December 2016. Guide to the Markets - UK. Data as of 31 December 2016. 55