Investing into Emerging Markets
Following the 2008 Global Economic Crisis the growth potential of the Emerging or Developing Markets has continuously been highlighted as a risk worth taking. Some economic commentators have suggested that it will be a necessary risk for those retail investors not wanting to re-assess their target returns on investment portfolios over the next 10 to 15 years.
Whether this is the case or not one thing is for certain. Financial Advisers seeking to deliver the best returns for clients have to consider some degree of exposure to developing markets, even though they may deem the risks too high for actual investment.
Defaqto has listed some of the funds which carry the Top Ratings from the Defaqto Fund Rating system. As with many sectors now, it is not sufficient for Advisers to look at the IMA Global Emerging Market sector alone when researching investments into the Emerging Markets. The reasons for this are as follows :
The IMA GEM Fund Sector ignores many funds investing in Asia. These are quite rightly positioned in the IMA Asia Pac (ex-Japan) sector.
The IMA GEM Fund Sector focuses purely on funds which carry a high allocation into equities (80% or more). Emerging Market Debt funds should be considered to both balance a portfolio's asset allocation, and as a stand alone investment decision.
The IMA Specialist Sector contains a number of Emerging Market funds as well.
|
Fund Name |
Rating |
IMA Sector |
6 Month Performance |
|
CF Canlife Far East |
5 |
Asia Pac (X Jap) |
6.53% |
|
Fidelity South East Asia |
5 |
Asia Pac (X Jap) |
10.44% |
|
First State Greater China Growth Fund |
5 |
Asia Pac (X Jap) |
12.17% |
|
Invesco Perpetual Hong Kong & China |
5 |
Asia Pac (X Jap) |
3.45% |
|
Gartmore China Opportunities Fund |
4 |
Asia Pac (X Jap) |
9.53% |
|
Invesco Perpetual Asian |
4 |
Asia Pac (X Jap) |
8.77% |
|
JP Morgan Asia |
4 |
Asia Pac (X Jap) |
7.47% |
|
Threadneedle Asia Fund |
4 |
Asia Pac (X Jap) |
6.75% |
|
Aberdeen Emerging Markets Fund |
5 |
GEM |
14.38% |
|
AXA Framlington Emerging Markets |
5 |
GEM |
13.21% |
|
Baillie Gifford Emerging Markets Growth |
5 |
GEM |
12.89% |
|
JP Morgan Emerging Markets |
5 |
GEM |
12.56% |
|
Baring Emerging Markets |
4y |
GEM |
10.31% |
|
Lazard Emerging Markets |
4 |
GEM |
14.14% |
|
Schroder Global Emerging Markets |
4 |
GEM |
6.81% |
|
Threadneedle Emerging Market Bond Fund |
5 |
Global Bond |
13.37% |
|
SW Latin American |
5 |
Specialist |
7.28% |
|
JP Morgan New Europe |
5 |
Specialist |
18.98% |
|
Invesco Perpetual Latin American |
4 |
Specialist |
9.20% |
|
Jupiter Emerging European Opportunities |
4 |
Specialist |
15.69% |
|
Neptune Russia & Greater Russia Fund A |
4 |
Specialist |
17.89% |
|
Threadneedle Latin American |
4 |
Specialist |
6.20% |
Source – Defaqto June 2010
Note – Past performance is not a guide to future performance.
Access to these funds can be gained through most tax wrapper products and platform ISAs.
Offshore Bonds tend to, now, offer unlimited choice of managed funds, which advisers can take advantage of.
The majority of funds in the Emerging Markets will be available through major platforms in ISAs.
Specific Funds will be available through the company ISA of the Fund Manager.
Onshore Bonds now offer a wider fund choice than ever before. Those products with the greatest choice of Emerging Market funds (bar products that have unlimited fund choices) are as follows :
Aviva Life & Pensions UK
Limited Portfolio Bond
AXA Investment Bond
Cofunds Portfolio Bond
FundsNetwork Investment
Bond
Legal & General Portfolio
Bond
Skandia Capital & Income
Bond
Skandia Investment bond
Winterthur Life
Investment Bond
Zurich Assurance Ltd
Sterling Investment Bond
For more information on Defaqto Fund Ratings visit www.defaqto.com/adviser/ifa
The above research & data is available to all Financial Advisers through our Defaqto Engage whole of market research system. Visit www.defaqto.com/engage-help/engage-ifa-edition