After a difficult period for emerging market stocks, the odds have tilted in their favour. A reversal in the strong dollar, China’s emergence from zero-Covid restrictions and cheap valuations add up to an attractive mix for those prepared to stomach the risks and volatility associated with investing in this space.JPM Emerging Markets Income (B5N1BC3) is an attractive means of playing an emerging markets recovery. This version of the fund is the income class which pays out dividends as cash to holders. If you want dividends automatically reinvested then opt for the version with the code B1YX4S7.A good stock picker is worth their weight in gold in the developing world where the dangers associated with holding the wrong companies are significant.

This fund has an excellent track record, achieving top quartile performance over three and five years and delivering an annualised total return of 9.5% over the last three years.

The income bias is an advantage beyond just providing exposure to dividends as companies which regularly reward shareholders with cash payments must have a measure of financial strength and discipline. The fund has a yield of 4.2% and 0.88% ongoing charges.

The US dollar tends to have an inverse relationship with emerging markets. If the currency strengthens, the largely dollar-denominated debt in EM countries becomes more expensive to service and to avoid capital disappearing to the safety of US assets, central banks have to put up interest rates. Higher rates tend to depress economic growth.

However, with the dollar now in retreat amid a US regional banking crisis and as the US rate hiking cycle seems to be nearing its end, the currency could shift from a headwind to a tailwind for emerging markets.

T Rowe Price’s Ritu Vohara says emerging market valuations are very attractive, trading at a 43% discount to developed markets, with ‘a lot of pain already priced in’.

Top holdings in the JPM fund include Taiwan Semiconductor Manufacturing Company (2330:TPE) and Samsung Electronics (005930:KRX) as well as a smattering of Chinese financial firms, Walmart’s (WMT:NYSE) Mexican offshoot and Indian software giant Infosys (INFY:NSE).

China accounts for a little more than a quarter of the fund’s holdings, with financials and information technology firms representing more than half of the portfolio.

It is important to reiterate that emerging market investments can be volatile. When times are good, they can do very well, but in tougher market conditions they can struggle. Therefore, it is important to have a long-term investment horizon and patience.

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