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Beware 'fragile five' interest risks: Strategist

Rising interest rate yields in emerging markets could pose a risk for investors, Gemma Godfrey of Brooks Macdonald Asset Management said Wednesday.

Treasurys in select emerging markets that pose the greatest risk are those with the highest foreign ownership. Withdrawals could affect those economies, she said. "The term that's being bandied around at the moment from the likes of Morgan Stanley is 'the Fragile Five.' That's Indonesia, India, Turkey, Brazil and South Africa."

On CNBC's "Halftime Report," Godfrey, head of her firm's investment strategy, noted that Indonesia recently saw its third rise in rates since August and still faces inflationary pressures.

(Read more: Jim O'Shaughnessy: Long-bond crisis coming)

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"I'd be very concerned and very cautious, and the way that I would trade this type of market is, I wouldn't say it's about being a bull or a bear but about eagle-eyed going in and being much more particular country to country within this type of area," she said.

Godfrey also noted the effect of the Federal Reserve's lack of a clear signal about when it will begin to reduce its $85 billion-per-month bond-buying program.

(Read more: 'I'm sorry for QE': Ex-Fed official)

"I'd say it's less of a taper tantrum and more of a taper tease, and the reason is that the Fed is really leading markets on without enough reason to commit," she said.

The target unemployment figure that would trigger a reduction of quantitative easing doesn't take into account a lower labor participation rate or underemployment, she said.

"There isn't going to be enough economics to be able to support the Fed in tapering so early. And if they do, it'll be because they want to benefit from momentum in stock markets that could protect them from any negativity," she said. "But it would be a mistake."

By CNBC's Bruno J. Navarro. Follow him on Twitter @Bruno_J_Navarro.