Emerging markets (EM) have been in rollercoaster mode since early summer, rocked by their vulnerability to a strengthening dollar and rising interest rates.
Assets across Latin America and Asia have been sold off, hit by the contagion effects from currencies in crisis like Turkey's lira.
The turmoil has left investors uncertain over whether to pounce on currently low valuations or run for the hills. How to best maneuver in this environment depends on what type of investor you are, J.P. Morgan's Nicolas Aguzin told CNBC's "Squawk Box Europe" on Wednesday.
If you're a long-term, strategic investor, it's worth holding out for emerging market returns, because fundamentals are positive, he said — but added that valuations could still fall further, due to market sentiment and the perception of trouble rather than anything else.
"Most of our time we spend thinking about long-term investments and over many cycles, not just one or two years," said Aguzin, who serves as chairman and CEO of J.P. Morgan Asia Pacific. "The strategic investors, they seem to be very interested in emerging markets especially where we're talking about India, about China. So there's a bit of a divergence from what the strategic investors are looking at and what some of the short-term investors are looking at."
The Indian rupee hit a record low this week at 72.84 to the U.S. dollar, with Indonesia and Thailand's currencies also taking a hit along with the rest of Asia, in part due to the impact of America's burgeoning trade war with China. Turkey's lira tanked to record lows in August over Ankara's reluctance to raise interest rates in an overheating economy and a diplomatic row with the U.S., sending shockwaves across emerging markets. Meanwhile, major Latin American markets Brazil and Argentina are facing turmoil of their own.