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Emerging Market Mutual Funds Tank

These are down days for emerging market mutual funds, battered by the crumbling debt market of developing countries around the world.

The woes affecting Russia now seem to be spreading to Latin America, and it appears the latest flashpoint - Venezuela - may see a currency devaluation.

"The markets aren't getting any better, and they're probably going to get worse," Carina Baranova, a fixed-income fund manager at Boston-based Schooner Asset Management, told Bloomberg Friday. "Investors are focusing on which country might be next to follow Russia and devalue their currency."

In the first three days of this week, Scudder Emerging Markets Income fell 10.4 percent and Fidelity New Markets Income and Aim Global High-Income funds were off by more than 9 percent, Bloomberg reported.

Year-to-date returns, as of Thursday, for some of the largest open-end emerging markets debt mutual funds were all in double-digit, negative territory, as follows:

Phoenix Emerging Markets Bond -29.4%
Scudder Emerging Markets Inc. -26.9%
Aim Global High Income -25.1%
T.R. Price Emerging Mkts. Bond -23.8%
Alliance Global Dollar Govt. -22.7%
Fidelity New Markets Income. -21.5%
Bear Stearns Emerg. Mkts. Debt. -15.0%

Written By Craig Tolliver, CBS MarketWatch

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