What the future holds for emerging markets

For many years, emerging market (EM) assets have been popular, with net capital inflows rising from around $25bn in 1980 to $1.2trn in 2012. However, this year has seen a sharp turnaround. Surveys of fund managers show the lowest exposure to EM equities since 2001, amidst 15%-20% declines for stock markets such as Indonesia Are we on course for a repeat of the 1997 Asian crisis? If not, when should investors look to buy into such assets? All crises are subtly different. Back in 1997, large EM external and government debt positions worried investors, while, today, balance sheets are...