Emerging market assets look cheap again - but is it safe to wade back in? A new Blackrock Investment Institute publication outlines the prospects for EM economies and assets. It contains the thinking of Blackrock's leading portfolio managers and an interactive graphic showing the emerging world's growing diversity.

Highlights include:

  • Growth in the emerging world is set to slow further as China rebalances its economy. Divergences between countries, asset classes and sectors are likely to widen.
  • Quantitative easing dampened market volatility. As the tide of liquidity reverses, volatility could rebound like a coiled spring.
  • Currency movements are first, second and third in EM investing. Depreciations have gone pretty far. Yet real rates are still too low, and rate hikes risk choking growth.
  • Signposts for change in EM asset prices are a stabilization or collapse in currencies, massive capital flight or inflows, economic momentum and China's economic trajectory.