The boom in emerging markets is over, according to Arnab Das, managing director of market research and strategy at Roubini Global Economics, who said investors thinking of cashing out should be careful.
"People over invested in them, the stories were overhyped, too much capital went in, asset prices were too high and there was too much credit extension. And now we're going to see the pullback of that process," he told CNBC Thursday.
Indonesia, Turkey, Brazil and India were among the countries which had seen excessive investment, Das indicated. He added that investors should not sell emerging markets in an "absolute sense" but should sell relative to other global developments. For example, Mexico could benefit from growth for the neighboring U.S.
(Read more: Is Asia poised for a sharp slowdown?)
Luis Costa, an emerging market debt strategist at Citi, told CNBC that investors should really delve into company fundamentals to see which stocks should be sold, and not just look at headline growth statistics for countries.
"You should be looking into balance sheet health, you should be looking into budget dynamics, you should be looking into basic balance or current accounts," he told CNBC Thursday.
Yields on 10-year benchmark U.S. Treasurys rose above 2 percent on May 22, after the Federal Reserve's policy minutes sparked fears the central bank could start tapering off its bond purchasing program, which has suppressed interest rates.
Shortly afterwards, emerging market (EM) currencies began to tumble. South Africa's rand has since tumbled 4.3 percent against the dollar, the has fallen 10.5 percent and the is down 8.5 percent.
(Read More: Buy Europe; Sell Emerging Markets: JPMorgan)
Local currency-denominated EM debt has seen a similar sell-off, after a positive start to the year. Pimco's "EM advantage local bond index" exchange-traded fund rose 5 percent at the beginning of the year, but gains have since been wiped out. Similar moves have been seen in emerging market funds from JPMorgan and BoA Merrill Lynch.
Expansionary policies – such as lowering rates or printing money - in these countries are limited, Das said, through fear of importing inflation as the currency weakens. It may not be a full-blown crisis but it is certainly a "growth trap", he added, saying there's a real balance sheet deterioration, especially in emerging Asia.
"One of the things going on here is a realization that the growth differential between emerging markets and developed countries is going to be narrower than it looked like in the immediate aftermath of the crisis," he said.
(Read More: 'Too early' for emerging markets: Faber)
But there are tactical opportunities out there, according to Costa, with debate about how soon the Fed will taper its $85 billion-a-month bond buying giving some emerging markets a slight bounce.
"As a trade there's something there," Roubini's Das added. "I would look for the most oversold markets...if you want to be a very high frequency trader and kind of trade the technicals and the flows I do agree there's probably a bounce being made."
By CNBC.com's Matt Clinch. Follow him on Twitter @mattclinch81