A Taste of Emerging Market Bond and Currency Funds

In other words, the countries that fared best were larger, including China, Indonesia, and India, and less exposed to global financial markets, which were collapsing. Despite having large domestic economies, Russia and Brazil were widely exposed to foreign markets and as a result suffered, Anderson notes.

Today, most emerging economies have a lower-export-to-gross domestic product ratio than they did in 2008, so their economies aren’t as vulnerable to a slowdown in exports and “virtually no countries,” UBS says, have high or rising current account deficits, with the exception of Turkey.

Also, few countries have large foreign financial market exposures, UBS says.

The danger remains with small, open economies, however.

“If global growth comes down hard, the Thailands, Taiwans, Czech and Slovak Republics, and even the Mexicos of the world will inevitably come down with it,” Anderson writes.