WASHINGTON — Entering what's expected to be the fifth year of a boom in emerging markets, investors may be ignoring mounting dangers, according to a global association of financial institutions.

"You have to be concerned (that) the pace of increased exposure to these markets has perhaps outstripped the capacity of investors to look at underlying fundamental risks," says Charles Dallara, managing director of the Institute of International Finance.

Private capital flows to the top 30 emerging markets — including countries such as Hungary, Ecuador and China — hit an estimated $502 billion last year, about the same as the year before, according to institute. Despite a modest decline expected this year, largely reflecting an anticipated cooling of commercial bank lending, capital flows to emerging markets will remain four times higher than the 2002 figure.

Total private investment in developing-country stocks, bonds and factories is expected to dip slightly this year to $468.7 billion, said the group.

In 2007, complacent investors could get burned if the U.S. economy slows unexpectedly or emerging economies suffer a sudden shock. Potential trouble spots include Chinese banks and Central European mortgage-backed securities.