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Expert: How to play EM stocks on dollar rally

Emerging market stocks have "lukewarm" prospects if the U.S. dollar sustains its rally, an emerging markets analyst said Monday.

"Unfortunately, we do not believe the dollar rally is over which means the headwind is still there. But we think we're more than two-thirds of the way for that dollar rally to be over," said Andres Garcia-Amaya, a macro research analyst for emerging market equities at JPMorgan Asset Management, which has more than $1.7 trillion in assets under management.

The dollar has climbed nearly 18 percent against a basket of trade-weighted global currencies in the last year. Many U.S. corporations with a large global footprint have blamed disappointing earnings on the U.S. dollar's strength.

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Strong dollar
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That trend has also been "a big deal" in weighing down emerging markets, Garcia-Amaya said in a CNBC "Power Lunch" interview.

Investors have cooled on their prospects, as $9.3 billion flowed out of emerging market funds in the week to June 11, according to funds tracker EPFR. That sum was the highest since 2008 at the height of the global financial crisis.

Read MoreEM exodus: More pain ahead?

But "lots of opportunities" to make money in the asset class remain. Stocks in countries wracked by geopolitical uncertainty, in particular, have upside. He noted that JPMorgan has taken an overweight position in Russia and Turkey.

Amid a tumultuous oil industry and tough sanctions from Europe and the United States, many Russian stocks have jumped this year. The Market Vectors Russia ETF, for instance, has climbed more than 26 percent this year.

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On the other hand, the iShares MSCI Turkey ETF has fallen nearly 20 percent this year.

CNBC's Ansunya Harjani contributed to this report