U.S. money managers Cumberland Advisors - with $2.3 billion assets under management - has cut its investments in Turkey to zero, fearing political unrest in the country will escalate and put the brakes on growth that's already slowed sharply to 2.2 percent last year.
(Read More: Turkey Violence: More Complex Than Arab Spring)
Demonstrations, now in their fifth day, are spreading across the country and the largely middle class protesters are challenging what they say is Prime Minister Recep Tayyip Erdogan's autocratic rule. Turkey's stock market plunged 10 percent on Monday in response, the most in a decade and Turkish bonds had their largest surge on record.
David Kotok, Cumberland's chief investment officer feared "more (stock market) weakness if social unrest intensifies" in the country. "We have taken Turkey to zero. Contagion risk is rising," Kotok told CNBC in an emailed response to questions.
However, Cumberland is not writing off the emerging market entirely. "The Turkish economy and equity market still looks attractive to us over the long run if the country can resolve this cultural conflict," said Bill Witherell, Cumberland's Chief Global Economist in a commentary published on June 4. "For the time being, we prefer to watch from the sidelines."