Quick, where were the highest returns in the emerging markets. Wireless telecom, right? For countries, maybe China? Wrong and wrong. Try automobiles and Indonesia. But there's a big caveat. While your clients could have seen an 81% return over the past 12 months, they would have to be foolhardy enough to put everything in Indonesia. The fact that Indonesia probably accounted for less than 3% of their total portfolio (if they followed the MSCI weightings), that high-octane investment added slightly less than 2% to their overall returns.

Taking into account such weightings, the sector that boosted returns the most was banking, according to Lipper data that looks at returns based on allocations. Following at a distant second was materials, and third was automobiles and components.

Gorky Urquieta, co-head of emerging market debt investing at ING Investment Management, notes that in the past, government bonds from many of these countries carried a credit risk component (default). But now investors who seek safer havens can find some investment grade places like Mexico or Brazil.

Investors took note. Broken out by country, Brazil took the top spot with a 3.5% boost to the average portfolio, once its 38.6% allocation is considered. India was second with a 3.4% portfolio contribution and Russia third at 2.9%.

ûAs Group Managing Editor of SourceMedia's Investment Advisor Group, Lee oversees all editorial aspects of our Bank Investment Consultant brand. He has spent half his 20-year journalism career at SourceMedia and legacy companies. Before taking over BIC in April 2011, he spent more than three years as managing editor of On Wall Street. And before that he was a senior editor at U.S. Banker magazine for four years. He also worked as an editor in the newsletter unit of legacy divisions of the company for three years, covering various aspects of the fixed-income markets.