Sovereign funds' fortunes turn as emerging assets sour

LONDON, Aug 21 (Reuters) - The world's biggest sovereign wealth funds may see their bumper profits of 2012 diminish this year as recent diversification into high-growth emerging markets starts to produce disappointing returns.

Their long-term horizon may allow many sovereign funds, which globally control $5 trillion of oil and other windfall assets, to weather losses. But the sheer size of these funds may increasingly limit the window of opportunities even when emerging markets recover.