Foreign investments are classified into two categories: foreign direct investment ( FDI) and foreign portfolio investment (FPI).

FORBES: The ABCs Of Investing In India

Companies flooded the big emerging markets with foreign direct investment and portfolio managers bought higher yielding bonds in all four of the BRICs.

FORBES: What A "QE3" Would Mean For Emerging Markets

Portfolio investment and foreign direct investment by Indians abroad has tailed off sharply since 1996 (see chart).

ECONOMIST: Indian bonds

By contrast, foreign direct investment in poor countries fell by a third during the crisis, and portfolio inflows fell by more than half.

ECONOMIST: Remittance corridors: New rivers of gold | The