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Monday, July 9, 2012

China slowdown weighs on emerging market funds

China's FIRST McDonald's
China's FIRST McDonald's (Photo credit: flickr.Marcus)
As China slips, the second-half performance for many emerging market mutual funds might soon follow. In recent months, investors have been pulling hundreds of millions of dollars out of stock funds that invest mainly in companies associated with the big four emerging market nations of Brazil, Russia, India and China. But it's China that is causing most of the worry for fund investors, amid signs that the world's second-largest economy is slowing more sharply than expected. Even emerging market bull Jim O'Neill, chairman of Goldman Sachs Asset Management, who famously coined the BRIC acronym, said he's been a bit surprised by the slowdown in China. But that said, O'Neill remains convinced China's economy will be more than enough to make up for any weakness in the other BRIC nations. "It is making the trajectory that I predicted difficult to stick with," O'Neill said about the slowdown. But he added, "I find it hilarious that people question the thesis on the basis of two quarters." ... Continue to read.
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