China's policy shifts are a bigger driver of the selloff in emerging markets than the Federal Reserve's decisionto dial back stimulus, according to Goldman Sachs AssetManagement.

Volatility will rise toward its long-term average, and thatmeans an increase in risk premiums, said Philip Moffitt, head offixed income in Sydney for Asia and the Pacific at Goldman SachsAsset Management, which had $991 billion of assets undersupervision worldwide as of September. The risks for differentemerging economies will become more idiosyncratic and Mexicopresents a buying opportunity following the rout, he said.

Markets from Turkeyto South Africa and Argentina were roiled during the past month as investors soldoff emerging-economy currencies, stocks, and bonds, promptingemergency measures from governments and central banks. The bout ofrisk aversion follows the Fed's decision to scale back assetpurchases and China's pledge to rein in leverage and give market forces amore decisive role in allocating resources.