Emerging markets have had a tough go of it recently. The once hot asset class has gotten beaten up, with the iShares Core MSCI Emerging Markets ETF down more than 6% in the last month.

Related: Emerging Markets Are Making a Comeback in 2013: BlackRock’s Koesterich

Then the IMF lowered its growth forecasts for emerging markets this week.

And China's finance minister is now tempering expectations for growth with GDP numbers out on Monday.

Related: China's “Giant Ponzi Scheme” Won't End Well: Jim Rickards

Jim O’Neill, formerly of Goldman Sachs, created the acronym BRICs to group together the then-briskly growing Brazil Russia India and China – he is now writing that emerging markets are stuck on the Fed’s elevator ride.

Related: How the Fed Could Cause the Next Emerging Markets Crisis: Rickards

“Not long ago, emerging-market governments complained about the Fed’s stimulus policy. They pointed to destabilizing inflows of hot money and called it a “currency war,” O'Neill writes for Bloomberg. “Now they’re alarmed because the policy is ending. Such is life on the receiving end of the exorbitant privilege.”

But Ruchir Sharma argues that’s too simplistic of a view. He’s head of Emerging Markets and Global Macro at Morgan Stanley Investment Management and author of "Breakout Nations."

Related: Tony Blair: Africa Poised to Be a Great Economic Story of the 21st Century

“The more important point is that these emerging markets have their own domestic problems and those were glossed over when the rising tide of global liquidity was lifting all these global markets up together,” he tells The Daily Ticker. “Now that the tide is running out we’re figuring out which ones have their problems and which ones don’t.”

And that means you can’t group countries representing 40% of the global economy and 80% of the global population into one homogeneous basket, according to Sharma.

So evaluating the domestic challenges in these countries becomes more important for investors. For example, how do you account for the political risk of the Turkish Prime Minister going after the “interest rate lobby” and investigating speculators in the face of protests and a falling currency? And if you’re an individual investor looking at a basket of emerging markets in an ETF for her 401K, is that no longer a good strategy given their diverse stories now?

Check out the above interview with Sharma to find out.

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