KNOWLEDGE CENTER

SEI fund managers and analysts on both sides of the Atlantic agree that Europe is the main factor driving today's market uncertainty and volatility, and that a recession there would be likely to precipitate a global downturn.

Since the beginning of August, sovereign debt worries in the European Monetary Union (EMU or eurozone) have flared up again with a vengeance. Unlike the episode earlier this year that focused on the Greek government's debt, the current flare-up has involved the government debt of Italy and Spain, a development that in turn has put the banking system and sovereign finances of core Europe (primarily France and Germany) at risk. As investors around the world learned in 2008, global financial crises are quite painful to endure, and there is widespread concern that the world could tip into one if European policymakers are unable to constructively address the eurozone's imposing fiscal challenges.

We believe the eurozone’s long-term challenges could prove insurmountable without either a partial dissolution of the European Monetary Union or much tighter integration of its members' fiscal operations.

Our portfolio managers and their funds' underlying managers remain closely attuned to Europe's ongoing debt crisis, and will continue to actively manage risk and seek out attractive investment opportunities as they arise.

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