Emerging market asset classes have experienced a broad-based sell-off across regions and asset classes, similar in severity to the Taper Tantrum in 2013. In contrast to the first half of the decade, we do not see this as the start of a prolonged period of EM underperformance. Improved fundamentals, a more growth-supportive China and more attractive valuations suggest to us that for investors with a longer-term investment horizon, emerging market assets offer good diversification and return potential. Still, heightened trade tensions and a Fed set on tightening further present meaningful risks, suggesting that emerging markets are likely to remain volatile in the near term.