The Invesco Perpetual Emerging Countries Fund aims to achieve capital growth primarily through a portfolio of shares in companies established and/or operating in countries where, in the opinion of the Manager, there is an emerging market. Exposure to such markets will partially be obtained through indirect investment in securities traded on other markets.
The crisis in global credit markets and the corporate failures of prominent financial institutions in the US and Europe during the month had an adverse impact on emerging equities. With global events overriding country-specific issues, all the regions within emerging markets suffered losses, with the MSCI Emerging Markets index falling by 15.6% in sterling terms. Emerging Europe and Latin America were the weakest regional performers.The global crisis of confidence hit Russian shares particularly hard in the country's biggest sell-off for a decade. Panic selling and liquidating positions on the back of rumours that a number of Russian banks were facing liquidity issues due to adverse market conditions contributed towards the decline.However, stocks staged a mild recovery on news of a US$100 billion emergency funding measure by the authorities to shore up liquidity. Within the Latin American region, Brazil was the weakest performer as a backdrop of softer commodity prices and higher interest rates soured investor sentiment.