Countries such as Mexico and India generally look safer now, while conditions in already risky countries like Brazil and Malaysia have deteriorated further, the fund group found.

The largest reduction in vulnerability was in Ukraine and Russia, thanks partly to better management of monetary policy. However, the firm warned that this could change if there is a re-escalation of conflict between the two countries.

SLI produces a heat map to assess the vulnerability of emerging market economies to future shocks, which is updated every six months.

Jeremy Lawson, chief economist at Standard Life Investments said: “Risk improvement was particularly prevalent in Eastern European countries such as Poland, Hungary and the Czech Republic, thanks to improving fiscal policy and falling inflation.

“Mexico and the Philippines which scored amongst the most resilient back in October also continued to strengthen – as a large oil importer the Philippines benefitted from falling oil prices. India and Indonesia were also out-performers, cutting fuel subsidies and spending more on infrastructure.

“At the other end of the spectrum, vulnerabilities are heightened in economies with large macroeconomic imbalances or reliance on exporting commodities, such as Brazil, Chile, Malaysia and Turkey.

“The dispersion of risk highlights that emerging markets should not be analysed as a homogenous group, it’s essential that investors adopt an active unconstrained approach. Whilst emerging market risk remains well below pre-Asian crisis levels, the next challenge ahead will be the beginning of the Federal Reserve’s rate hiking expected in the second half of 2015 – it’s the pace of this that will prove critical.”

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