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Grappling with investor fears over rocky EM markets

The No 1 reason is that China's problems could weigh on EM growth rates.

Pimco, once the world's largest manager of EM bonds, has seen industry-lagging returns from outsize bets in Brazil and Russia, propelling an investor exodus that is getting worse by the month.

CURRENCY turmoil in China and fears of a global slowdown have led investors to abandon emerging markets (EMs) in droves, rattling the large asset-management firms that have long promoted such investments in their hunt for higher returns.

For more than a decade, star managers at Franklin...