Ranking the Buyside: Beaten by the Index
Exceptional volatility caused by the global financial crisis has wiped out much of the last five years of hefty fund gains. Managers struggle to position for recovery.
by Ben Miller
Fund managers focused on Latin America were caught with their
pants down when global markets erupted in 2008. Though many
will claim in hindsight to have had doubts about subprime
mortgages or emerging markets valuations, few were prepared
for the mayhem in even the region's best equipped economies.
Much of the
last few years of bumper gains were erased by last year's
panicked selloff. As of late May, a Lipper average of
US-domiciled EM debt funds - which typically have at least a
third allocated to LatAm - posted a one-year
annualized total decline of 8.66%, much more than the 1.32%
lost by JPMorgan's EMBI Global Diversified index, the sovereign
debt standard. Five-year annualized returns were 8.10%,
compared to an 8.23% gain for the EMBI.
Those at the top of the list are beating the index, but not
by much. The...
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