The $21.8 billion Oppenheimer Developing Markets Fund in New York, which beat 91% of peers last year by loading up on emerging-market consumer stocks including India's Hindustan Unilever Ltd., has trailed 93% of rivals this year with a 3.9% drop, Bloomberg data through Feb. 1 show. Oyster Funds' Luxembourg-based $3.5 billion European Opportunities fund is losing to 94% of its peers, following a 21% gain in 2010 that topped 82% of rivals, the data show.

"Many fund managers we suspect would have found the beginning of 2011 to be quite painful," Andrew Lapthorne, the Societe Generale SA global quantitative strategist in London, wrote in a Feb. 1 report. "The consensus seemed very much positioned for more of the same in 2011, but from many angles the reverse seems to have happened."

Valuation Discount

Justin Leverenz, manager of the Oppenheimer fund, declined to comment, according to spokeswoman Kaitlyn Downing. Oyster's Eric Bendahan wasn't available to comment, spokeswoman Leila Bernasconi said.

The value of world equities climbed 1.6% in January and reached $53.6 trillion on Feb. 1, the most since June 2008, data compiled by Bloomberg show. The MSCI World Index, a gauge for $29.6 trillion of advanced-country shares, is valued at 15.9 times reported profits, a 29% discount to the average level since February 1995, data compiled by Bloomberg show.

Analysts have boosted estimates for 12-month profit growth in the MSCI All-Country index to 25% from 23% at the end of December, according to data compiled by Bloomberg.

"There has been new money coming in," said Andrew Milligan, who helps oversee about $232 billion as head of global strategy at Standard Life Investments in Edinburgh. "There is still an underlying conviction that the economic recovery has legs, that profits will be positive."

Short-Lived Shift

This year's shifts will probably be short-lived, according to Peter Oppenheimer, a London-based equity strategist at Goldman Sachs Group Inc. More than 60% of similar rotations in Europe during the past 30 years failed to last longer than three months, he wrote in a Jan. 26 research report.

Maria Gordon, the London-based emerging market equity portfolio manager at Pacific Investment Management Co., which oversees about $1.2 trillion, said she's looking for opportunities to buy shares of this year's laggards.