Emerging markets (EM) are facing more headwinds than developed markets. If we are correct in our view of a mid-cycle slowdown, emerging markets are unlikely to post outsized relative returns due to weaker support from developed market demand. The slowdown in China, hawkish central bank activity, inflation, rising US interest rates and a stronger US dollar, along with precarious risk sentiment, are all hurdles facing emerging market economies. We expect opportunities to be more idiosyncratic in the asset class this year, and recommend tactical exposure to individual regions and countries, rather than broad based EM exposure. Our outlook for EM would improve if inflation subsided, China surprised to the upside, and developed market central banks pull back on policy tightening measures. Clarity on these factors is unlikely to occur until Q2 or later, and volatility in global markets will likely cap demand for this risky asset class. Take an underweight position relative to developed markets to begin the year while remaining abreast of potential individual opportunities in commodity producing countries where exposure can be added during periods of risk-on sentiment.