Ranking Economic Vulnerability in Emerging Markets
If inflows of capital suddenly tighten, certain emerging markets are more at risk than others.
Note: This article is part of Morningstar's December 2013 Emerging-Markets Week special report. It originally appeared in the December/January 2014 issue of MorningstarAdvisor magazine. To subscribe, please call 1-800-384-4000.
Investments in emerging-markets economies have outperformed those in developed countries over the global business cycle that began in 2009. Loose monetary conditions set by the central banks of Japan, the United Kingdom, eurozone, and, most importantly, the United States, depressed yields and prompted developed-market investors to seek higher yields overseas, often in emerging markets.