"Today's economic challenges are real but manageable, said Joanne C. Irvine, a portfolio manager for the Aberdeen Emerging Markets fund. Lately, BRIC has become a four-letter epithet.The reaction of emerging markets to the British vote has also underscored a new reality for investors: Emerging markets no longer provide the diversification benefit they once did, said Roger A. Aliaga-Diaz, senior economist with Vanguard's Investment Strategy Group. MSCI's Emerging Markets Index fell as much as the British-focused FTSE 100 in the days just after the ballots were counted. "Correlations have increased since the 2000s between emerging markets and developed ones," Aliaga-Diaz said.During the surge of the 2000s, one of the attractions of emerging markets was that they tended to zig when the developed world zagged. Emerging markets is a riskier asset class, so the booms and busts are bigger.

Source: Economic Times July 17, 2016 12:24 UTC