Emerging markets have had a good run. But things may get bumpier

TOKYO/KUALA LUMPUR (Apr 17): Emerging markets have weathered this year’s market volatility just fine so far. But some investors are using this as an opportunity to get a lot more selective, with challenges looming from trade tensions to the winding down of central-bank stimulus.

"Now we can rule out the ‘global synchronized growth’ theme, which dominated early this year," said Jinha Kim, head of global fixed income in Seoul with Mirae Asset Global Investments Co., one of South Korea’s biggest money managers. The firm has reduced its position in emerging-market currencies and bonds to neutral, and shifted to underweight for Turkey and Mexico specifically, Kim said.

Kim cited trade tensions in the wake of protectionist moves by US President Donald Trump as a concern for emerging-market growth prospects. Nomura Holdings Inc. analysts led by Rob Subbaraman in Singapore listed trade tensions as one of four potential triggers for "a major market repricing of EM risk premia, sparking a painful EM snapback" in a recent research note. And here are the other three:

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