Oil continues to fall, with West Texas Intermediate dipping below $45 a barrel.
The free-fall in crude is one of the reasons why a veteran market strategist is cautious about investing in emerging markets.
David Bailin, global head of managed investments at Citi Private Bank, tells CNBC's "Power Lunch" on Wednesday falling petroleum and a Fed-induced rally in the U.S. dollar are two of the biggest risks.
"We remain underweight emerging market debt in EMEA and Latin America and some share markets with strong petroleum exposures. Given its external vulnerability and potentially economically-harmful political scandals, the Citi Private Bank Global Investment Committee increased its underweight in Brazil," Bailin said.
The bank is reinvesting proceeds in Japanese small-cap shares.
"North Asia's external position is very different from other EMs with current account deficits, though this does not protect them from all external concerns. Given a strong negative correlation to the yen and the country's large petroleum trade deficit, Japanese shares may be a relative beneficiary of higher short-term U.S. rates," Bailin said.