Don't put all Emerging Markets in one basket
Don't put all Emerging Markets in one basket. Nouriel Roubini says volatility in Emerging Markets has been driven by both domestic factors such as loose macro policies and frozen structural reforms as well as global ones (China's slowdown, Fed tapering, End of commodity super-cycle and uncertainties about growth). Roubini says many EMs remain vulnerable, such as Brazil, India, Indonesia, South Africa and Turkey, and are in for a bumpy ride over the next year or two. However, there are many reasons to be positive about EMs. Adjustments are taking place; the risk of outright crisis is low given improved fundamentals; some, such as South Korea, Poland, Malaysia, the Philippines and Mexico are geared to benefit from the likely Developed Market recovery. The bottom line: EMs with relatively strong macro and policy fundamentals may partially decouple from more fragile EMs, better withstand global shocks and even benefit from stronger DM growth.