The world's emerging markets are experiencing tremendous setbacks as investors pull away in worries of China's economic stability amidst increasing confidence in the euro zone and general world economy.

According to the monthly poll of Bank of America Merrill Lynch, allocations to the global emerging market equities reached the lowest levels since four years ago. Nine percent of the respondents are reportedly underweight.

Almost half of the fund managers reported an overweight status in total equities, an increase from 41 percent in May.

A total of 248 managers amounting to $708 billion in assets participated in the poll. The poll also showed that a net 25 percent put emerging markets into the underweight category in the following 12 months. This is the lowest reading ever for emerging markets.

"The lows in emerging market equity and commodity allocations suggest the market has over-positioned itself for a shock from China," said Michael Hartnett, Bank of America Merrill Lynch Global Research chief strategist Michael Hartnett said.