Investment management firm ING IM, has reduced its exposure to emerging market assets. It says macro policies in emerging market countries with the most negative current account dynamics are not improving.

On fixed income, ING warns that rising developed market bond yields and low emerging market premiums could put more pressure on flows from developed to emerging markets. The countries it is most uncomfortable about are India, Indonesia, South Africa and Turkey where the dependence on foreign capital has been the highest recently and current account deficits have been either high or rapidly increasing.

Turning to equities, ING has downgraded emerging markets from a small overweight to neutral. The firm says that relative fundamentals and trends in other asset classes are indicating caution.