LONDON, June 16 (Reuters) - Investors are waking up to the structural differences between countries classed as emerging markets and are becoming less inclined to treat them as a homogenous group, according to a survey published on Monday.
The study by think-tank Create Research and asset manager Principal Global Investors showed that after suffering losses in recent emerging market volatility, many investors are now scrutinising individual countries more closely.
The survey of 700 pension funds, sovereign wealth funds, consultants and asset managers in 30 countries with combined assets of $29.7 trillion showed that the percentage remaining optimistic about the asset class nearly halved in two years.
"Investors have not lost faith in the emerging market story; they are simply questioning it. The scales have tilted somewhat from 2012 to 2014," the report said.
The percentage of so-called "believers" in emerging markets fell to 20 percent from 38 percent between 2012 and 2014, while "sceptics" increased to 28 percent from 18 percent.
When the United States' Federal Reserve began winding down an $85 billion-a-month money printing programme this year, emerging markets started to suffer asset price volatility amid fears that countries reliant on foreign investment to plug their balance of payment gaps would struggle.
Investors nursing losses from the ensuing turmoil are now more likely to examine countries and their economic benefits on a case-by-case basis.
Countries identified as capable of pushing through economic reforms are seen as most attractive, the report says, with more than a third of respondents identifying China as able to deliver strong returns over the next three years.
China is in the middle of a push to remodel its economy away from a frothy export-dependent model that has fuelled the breakneck growth of recent decades to become consumption-led, growing more slowly but on a more stable basis.
More than half of respondents to the survey said they thought China would make significant progress in implementing economic reforms, while only six percent said they thought the same of Russia.
"The study indicates there is no longer a blanket acceptance of the emerging market story. Investors' return expectations have dropped markedly for equities and bonds," said Nick Lyster, European CEO of Principal Global Investors Europe. (Reporting by Chris Vellacott; Editing by Gareth Jones)