Under the cosh
BEING an emerging-market fund manager used to be fun. They enjoyed trips to exotic locations, faced less competition than those managing American or European equities and were so flush with cash that some funds could turn investors away. Today, emerging-market investing is less of a jaunt. The globetrotting that money managers do now is mainly to beg nervous investors not to sell up.
Their entreaties are falling on deaf ears. In August alone investors pulled $10 billion from bond funds and $24 billion from various types of equity funds, according to the Institute of International Finance. Add in the effect of falling markets and the stock of investment in emerging-market exchange-traded funds (ETFs) and mutual funds has fallen from $1.37 trillion in December to $1.17 trillion now, the lowest since June 2012. Money is being carted away from the emerging world almost as fast as during the “taper tantrum” of 2013. Brazil, China, Indonesia and Turkey have suffered the largest outflows, largely due to continuing doubts over their growth prospects and the stability of their currencies. Faced with pervasive uncertainty, investment managers of all stripes have...Continue reading
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