Emerging markets are one sector that has, in the main, weathered the recent subprime storm. Investors are cautiously optimistic about the prospects for the rest of the year, but outperformance will be reliant on careful asset selection. Economic fundamentals among major emerging markets remain solid on the whole with growth lingering above long-term averages, though not quite matching last year's heady 7.4% pace. Fiscal and external balances continue as sources of strength.
As the year unfolds it