NEW YORK ( TheStreet) -- After a decade of outperformance. emerging markets stocks and bonds are headed for choppy seas, according to Goldman Sachs economists. Forecasters at the investment bank argue emerging markets assets "are unlikely to deliver anything close to the kind of risk-reward that investors had become used to" in the last decade, and they add that "absolute returns are likely to be much lower." Five trends have contributed to the emerging market outperformance, Goldman's economists write. These include massive Chinese growth, rising commodity prices , sovereign deleveraging, tame inflation and falling interest rates in the U.S. All of these trends are now either reversing or flattening out, according to the report. On the plus side, Goldman's economists write that emerging markets are on sounder financial footing than they were in the past, and they have lower debt-to-GDP ratios than many developed world countries. Emerging markets stocks have certainly taken it on the chin of late. Vanguard MSCI Emerging Markets ETF ( VWO), for example, is down more than 15% since May 8 vs. a 1.21% drop for the S&P 500. -- Written by Dan Freed in New York. Follow @dan_freed
China's erratic stock-market and Brazil's credit-rating downgrade sent investors scurrying from emerging-market exchange-traded funds during the third quarter -- and there's probably further selling ahead.