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Investors rejected emerging market stocks as they braced themselves for President-elect Donald Trump’s proposed trade tariffs and battled a rising U.S. dollar and rising U.S. yields. bonds.

MSCIs emerging markets index, which tracks nearly $7.6tn in stocks across China, India, Brazil, South Africa and other markets, has fallen more than 10 percent since hitting a two-and-a-half-year high on October 2. Developed stocks in the market were almost flat during that period.

Emerging markets were hit by bets that inflationary policies such as tariffs and tax cuts under Trump, on top of an already good one. eCONOMYwill force the Federal Reserve to continue raising interest rates for a longer period than previously expected. US government bond yields have been higher in recent weeks as traders reassess their outlook for inflation.

“It’s clear with the rise in US yields and the strength of the US dollar . . . This is definitely not an environment for new markets to be created,” said Emre Akcakmak, a portfolio consultant at the emerging fund manager. market East Capital, adding “the major markets that account for two-thirds of the (MSCI) index are all under pressure” .

Chinese stocks, which make up the largest part of the index, have fallen 15 percent since Oct. 2 on concerns about the health of the country’s economy. India and South Korea, two other emerging market heavyweights, have also endured heavy losses in recent months.

Investors have pulled about $3bn from global emerging market equity funds so far this year, on top of $31bn in outflows last year, according to JPMorgan data.

Longer periods of higher US rates and a strong dollar often entice US investors to stay at home rather than take more risk investing abroad.

Investors are now betting on countries to try to weaken their own currencies and make their exports more competitive in response to US tariffs, a move that would weaken the market’s dollar earnings.

“There is a consensus case that protectionism is getting worse and that America first is the only way out,” said Archie Hart, emerging market equities portfolio manager at Ninety One. However, he added that markets have been pricing in a stormy trade relationship for years.

Some investors are positioning for a sell-off in emerging market assets in the first half of the year, followed by a rebound, in a bet that tariffs will initially be set higher than consensus on Wall Street, only to shrink as Trump attacks deals with individual countries.

“Right now, what we’re seeing is a very emotional, irrational reaction and that has historically created buying opportunities,” said Kristina Hooper, chief global market strategist at Invesco.

However, some investors are still reluctant to jump back into emerging markets because it means a large underlying exposure to Chinese stocks, unless they screen them out of the indexes, which may overshadow the movements of other countries.

Those concerns were underlined last week when shares of social media and gaming giant Tencent fell sharply after the Pentagon designated it as having links to the Chinese military. The company makes up about 4 percent of the MSCI index, or roughly the same as the entire weight of the benchmark for Brazilian stocks.

“China has recently become, for many people, a bit of a pariah; it’s not investable,” said Mark McCormick, head of foreign exchange and emerging market strategy at TD Securities.