Bringing you live news and features since 2013
Bringing you news, views and analysis since 2013

2735

Russia and China lead major bounce over past six months, says Moneyspider.com

RELATED TOPICS​

Steadily rising values are highlighting the attractions of some global emerging market funds for investors with a reasonable appetite for risk, according to data by fund analyst Moneysp

Steadily rising values are highlighting the attractions of some global emerging market funds for investors with a reasonable appetite for risk, according to data by fund analyst Moneyspider.com.

In the first four months of the year China’s Shanghai Composite index rose by nearly 40 per cent, while Russia’s RTS index enjoyed a bounce of 28 per cent and Brazil’s Bovespa also gained a healthy 21 per cent. India’s Sensex went up by 14 per cent.

According to Moneyspider.com, Neptune’s Russia and Greater Russia fund has had a storming three months: from 5 February to 5 May, the fund leaped by 59.76 per cent, signalling a major revival in the fortunes of the economy.

Jupiter China, meanwhile, has enjoyed an exceptional volte face in its fortunes over the past six months: since the dark days of last autumn, the fund jumped up by 48.65 per cent.

 ‘It is looking like this could be the time to get into emerging market funds,’ says Moneyspider.com’s Tony Ahearne.

‘We have already seen early overtures by the major institutional and pension fund investors – while dividend yield across major emerging markets is currently running at around 3.5 per cent.

‘Investors should be looking for a solid, well diversified fund which preferably carries plenty of exposure to China, which is at the more robust end of emerging market economies.

‘It looks as if China remains domestically strong, and this economy is likely to spearhead the emerging market recovery.’

After a difficult 2008, emerging markets began to recover back in November, hard on the heels of China’s unveiling a huge stimulus package.

The USD586bn fiscal stimulus package sparked hopes that exporters in many emerging markets would benefit from increased Chinese demand.

‘We also have the scenario whereby emerging markets are being favoured by institutional investors as they are not so exposed to toxic assets and dangers of nationalisation as their western counterparts,’ says Ahearne.

The best performing, Moneyspider A rated emerging markets fund over the past five years is Baillie Gifford’s Global Emerging Market fund, which rose by 135 per cent over the period. A GBP5,000 investment into this fund at the end of April 2004 would now be worth GBP11,855.

Aberdeen, JP Morgan and Lazard are all out-performing with Moneyspider.com A rated funds.

But while the six and three month figures are startlingly good given the wider economic malaise affecting other areas of equity investment, Ahearne says short term performance figures are not necessarily a guide to how a fund is going to do over more traditionally accepted three and five year time frames.

‘These early signs are exceptionally encouraging, and it will come as no surprise that institutional money is now finding its way to emerging market coffers,’ he says. ‘But investors should not rush in, and the general rule of thumb is not to have any more than five per cent of your portfolio exposed to what is after all a higher risk investment strategy.’

Latest News

New research from Carne Group reveals fund managers expect alternative asset classes to see the..
Brown Brothers Harriman Co has expanded its relationship with AllianceBernstein AB by adding to its..
The trading and investment platform eToro has extended its proxy voting feature to all stocks..

Related Articles

UK map
UK local government pension schemes (LGPS) are leading the charge on investment in private markets issuing tenders set to be worth billions of pounds in the coming years...
UK local government pension schemes LGPS are leading the charge on investment in private markets issuing tenders set to be..
The trend of private equity firms acquiring businesses in the professional services sector continues with CVC Capital Partners eyeing a possible buyout of EY’s Italian consulting branch...
The trend of private equity firms acquiring businesses in the professional services sector continues with CVC Capital Partners eyeing a..
Pension funds
UK defined benefit (DB) pension plan sponsors could have access to GBP 1.2 trillion in surplus assets over the next decade, industry research reveals...
UK defined benefit DB pension plan sponsors could have access to GBP 1 2 trillion in surplus assets over the..
Tim Crawmer, Payden & Rygel
Tim Crawmer and Frasat Shah of Payden & Rygel write that higher yields are attracting more demand from investors. Also, given that equities had a strong year last year, big funds have taken some chips off the table in equities and put them into fixed income...
Tim Crawmer and Frasat Shah of Payden Rygel write that higher yields are attracting more demand from investors Also given..
Subscribe to the Institutional Asset Manager newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by