Developed market stocks and related exchange traded funds could outperform in the wake of the sell-off as emerging economies still face many hurdles.

Specifically, Fidelity Worldwide Investments’ global chief investment officer for equities, Dominic Rossi, argues that U.S. stocks will lead the recovery after the markets stumbled on poor positioning and not due to deteriorating fundamentals, Reuters reports.

Over the past month, the SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) has declined 5.8%, SPDR S&P 500 ETF (NYSEArca: SPY) fell 6.7% and PowerShares QQQ (NasdaqGM: QQQ), which tracks the Nasdaq-100, declined 7.4%.

Rossi attributes the recent selling to a strengthening U.S. dollar and rising expectations for higher U.S. rates. Additionally, he blames hedge funds’ trading strategies.

“The structural factor that has triggered this relates to U.S. dollar and tightening financial conditions, but the market correction has been exaggerated by poor positioning,” Rossi said. “Long-only funds have not moved much but the hedge fund industry has been caught on the wrong side of the trade. And when hedge funds get caught they tend to sell first and ask questions later.”

Consequently, the recent selling has pushed down valuations, which could lure investors back into a market.

“I am looking to buy markets at these levels, particularly U.S. securities,” Rossi added.