Fears about deteriorating economic conditions in China, Brazil and Russia have led to a massive retreat from emerging market exchange traded funds.
So far this year investors have pulled $19 billion from emerging market ETFs but experts suggest these vehicles are vulnerable to much more selling pressure.
Geoff Dennis, head of emerging markets equity strategy at UBS, the bank, said: "It feels like no one wants to be in emerging markets at the moment."
According to Bank of America Merrill Lynch's monthly survey of fund managers in September, the number of investment managers that are "underweight" emerging markets is the largest since 2005.
The two largest products tracking these markets — BlackRock's MSCI emerging markets ETF and Vanguard's FTSE emerging markets ETF — have experienced divergent levels of outflows.
BlackRock's fund suffered net withdrawals of $7.4 billion, while Vanguard's ETF, which comprises mostly retail investors who tend to be "stickier" than institutional investors, had outflows of $1.1 billion.
Ursula Marchioni, chief strategist at iShares, BlackRock's ETF arm, said: "It is too early to call a bottom in emerging markets, but valuations now appear attractive."
Ritesh Samadhiya, an equity strategist at BofA Merrill Lynch, said fund managers fear a possible recession in China and the threat of a broader debt crisis in emerging markets.
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The US Federal Reserve cited concerns over China as a factor in its decision not to increase US interest rates on September 17.
BlackRock is hopeful this will improve the situation. "The Fed's decision to hold rates could provide a boost to sentiment, but fundamentals in emerging market economies remain weak and we expect to see more volatility," said Ms Marchioni.
Since the Federal Reserve's announcement, $1 billion flowed into BlackRock's MSCI emerging markets ETF, although this is due to some investors closing short positions and ending bets on further price weakness.
Other casualties of the sell-off include BlackRock's single-country ETFs that provide exposure to Brazil, Mexico and South Korea. Together they registered net outflows of almost $2.3 billion this year.
China-focused ETFs have also been subject to extreme pressure, with the Shanghai stock index down 40 per cent since its peak in late June.
The iShares FTSE A50 China ETF, which is listed in Hong Kong, has seen outflows of $5.6 billion this year. Mainland Chinese assets managers have also been hit by withdrawals. Harvest, China Asset Management, Huatai-Pinebridge, CSOP and E-Fund together experienced net outflows of $18 billion this year.
ETFs tracking Chinese markets were dented after volatile conditions led to trading suspensions of more than half the companies on the country's two main exchanges in July.
Managers insisted their Chinese ETFs traded without interruption despite the suspensions in many of the underlying stocks. This failed to convince the majority of investors to stick with their funds, and experts suggest they might not be persuaded to return.