While more people are dipping their toes back into emerging market stocks and exchange traded funds, institutional investors warn that the improved strength in developing markets is only a tactical value play and not a long-term trend.

After the broad sell-off in the first quarter, emerging market stocks are hovering near a five-month high, reports Natsuko Waki for Reuters. [EEM’s Relative Strength Looks Good Against S&P 500]

The Vanguard FTSE Emerging Markets ETF (NYSEArca: VWO) has surged 7.1% and iShares MSCI Emerging Markets ETF (NYSEArca: EEM) gained 6.6% over the past month. [Overweighting Equity ETFs, Foreign and Domestic]

In the past two weeks, emerging market equity funds have attracted $5.4 billion in inflows, according to EPFR data.

However, some observers are concerned about long-term structural economic difficulties in the emerging markets, like higher cost of funding for companies.

“The long-term investment landscape suggests emerging markets will continue to underperform in the long run,” Andy Warwick, multi-asset portfolio manager at BlackRock, said in the article. “A rising rates and strengthening dollar environment is a real headwind.”