Specialist funds dedicated to the once-vaunted BRIC quartet of emerging markets face a bleak future, as many investors have pulled out due to years of collective underperformance by the bourses of Brazil, Russia, India and China.

The sharp decline in assets is forcing managers to close BRIC funds or radically rethink their strategies for the four largest emerging economies. These include Goldman Sachs, whose then chief economist Jim O'Neill coined the acronym in 2001.

The death knell for the sector may now have sounded as Goldman's asset management arm has rolled its BRIC fund into a broader emerging market product, telling the U.S. Securities and Exchange Commission it did not foresee "significant asset growth" for the fund.

Assets at the nine-year-old fund had plunged to below 200 million euros ($215 million), according to Thomson Reuters fund information service Lipper, from around 1.2 billion euros in its 2010 heyday.

O'Neill's concept spawned a large sub-set of emerging market funds and even a development bank set up by the four countries together with South Africa. But BRIC funds' total net assets have shrunk to just 5 billion euros from the 22.4 billion they boasted at the end of 2010, Lipper data shows.

The decline in fortunes has been underway for some time. Stock markets in China, Russia and Brazil, weighed down by big, inefficient state-run companies, have fared far worse than smaller emerging markets such as Indonesia and the Philippines.

Economic growth and reform have ground to a halt in Brazil and Russia, while there are doubts about China's financial stability. Indian stocks have done well this year and last, but only after a period of poor performance, and the government is struggling to get tax and labour reforms through parliament.

"Bundling the BRICs together may have made sense in 2001 but in recent years they have all gone in different directions," said Lena Tsymbaluk, an analyst at fund research house Morningstar. Demand from clients for rating BRIC funds had subsided in recent years, she added.

A dollar invested in MSCI's BRIC equity index at the end of 2009 would have lost 30 cents, double the 15 cent loss anyone who tracked MSCI's broad emerging stocks index would have suffered. By contrast, investors who took a punt on world stocks would have made a 45 cent profit over the period.

BRIC funds tracked by Boston-based EPFR Global have suffered net outflows every year since 2011. They have lost $1.4 billion this year, after shedding $2 billion last year, EPFR Global said.

Lipper data shows 92 BRIC funds remain active, but that is eight fewer than in 2013.

Critics have long dismissed the BRIC concept as opportunistic and driven by marketing to eager investors. Investing in just four countries is a recipe for failure, they say, especially when emerging markets are faring badly anyway.

Far from offering the best of emerging markets, the reverse has been true in recent years. "BRICs have underperformed and with higher volatility - the asset class has actually become riskier than EM as it is more concentrated," Tsymbaluk said.

She notes the MSCI BRIC index contains 300 companies versus 800 in the emerging benchmark and a large part of them are state-run firms and commodity producers.

The BRIC index has indeed been more volatile than broader emerging equities. Higher volatility implies more risk because share prices can move dramatically in either direction over a short time.

Nitin Dialdas, chief investment officer at Mandarin Capital in Hong Kong, says investors have become more discerning. "The investment climate has gotten tougher in recent years so such fad-based investing has gotten less popular over time," he said.

Even those managing BRIC funds are cautious. Kunal Ghosh, who runs the Allianz BRIC stars fund, says he won't rule out merging it with a broader emerging fund in future if clients demand.

Meanwhile, in the past two years his fund has taken advantage of leeway allowed under its mandate, investing only two thirds of its assets in the BRICs, with the rest in other emerging markets.

"If you become dogmatic about the acronym and devote 100 percent of your assets to BRIC, you will get poor returns," Ghosh said, though he believes emerging markets as a group will struggle to perform well unless the four biggest components pick up.

His fund has outperformed most peers as well as the benchmark in recent years and yet, according to Lipper, its net assets stand now at 276 million euros, down from over 1 billion euros in 2010.

"The Goldman fund's closure means doesn't mean that BRIC is dead, what it shows is that the old way of investing in BRICs is dead," said Ghosh.