GEM managers stay defensive after tough 12 months

Managers in Global Emerging Markets sector are waiting for an end to EM tightening cycles and resolution of eurozone crisis

After a sustained period of outperformance, the Global Emerging Markets sector has faced a difficult 12 months, pushing most managers onto the defensive. A record £1.7bn in net retail sales in 2010 and a sector average three-year return of 55.1% tells just part of the story. Over one year, the sector is the second worst performing sector in the IMA universe as funds shed an average of 17.1% in the 12 months to 30 September. Pulled down first by fears of overheating developing economies and then, conversely, by fears of renewed recession in the West, most managers are now waiting for a...