Very few emerging market debt funds have performed consistently over the long term as managers fail to adapt to changing market conditions, according to Fitch Ratings.
New research from the group said only 11% of EMD funds remained in the first or second quartile over 2005 to 2008, and 2008 to 2011. “Worse, around 20% of funds moved from top quartile to bottom quartile and vice versa over the same periods,” the report said. “This lack of consistency shows EMD managers, as a whole, are ‘beta’ rather than ‘alpha’ players.” Some 18% of EMD funds moved from the bottom quartile to the top quartile over these periods, and 22% dropped from the top quartile to the bottom of the rankings. “Post 2008, EMD performance drivers became more global and more com...
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