How much bang do fund managers give for their investors’ bucks? It’s a question that has provoked plenty of debate in the FT recently, prompted not least by the “scandalous index cloning epidemic” in which supposedly active managers charge high fees for simply following a benchmark.
EM investors are far from immune. So they may be interested to hear of a new service offered by Copley Fund Research, which tracks the performance of 100 of the biggest global emerging market equity funds, with a combined $265bn of assets under management. Read more
Enthusiasm over Narendra Modi’s election in India and fears that Dilma Rousseff may be re-elected in Brazil have prompted a sharp reversal in the two countries’ positions among equity fund managers.
Source: Copley Fund Research
According to a report published on Monday by Copley Fund Research, which tracks the investments of 100 global EM equity funds with $280bn of assets under management, India overtook Brazil in September to become the second biggest EM after China in terms of aggregate country holdings, with $31.6bn in AUM, ahead of Brazil’s $29.6bn. Read more
Unhealthy lifestyles are spreading through emerging market (EM) economies as people adopt fast-food diets, work in stressful and sedentary jobs and contend with worsening pollution. These are unwelcome trends unless, perhaps, you happen to be an investor in EM healthcare stocks.
A proliferation in ailments, rising incomes and growing government support for healthcare in EM countries are bolstering the portfolios of Sectoral Asset Management, a fund company with about $3.5bn under management. In March this year, it publicly launched a fund invested solely in EM healthcare companies. Read more
How do you invest in emerging markets (EM) at a time when the wheels appear to be coming off the “Washington consensus” in several parts of the world?
This is the key challenge for Gary Greenberg, head of EM at Hermes Fund Managers. Like many investors, his basic long-term bet has been that developing countries would continue to implement free-market economic reforms over time. Read more
There is no doubt that emerging market (EM) investors have cheered up considerably of late. Following a torrid January and February, virtually all asset classes in the EM universe appear – on aggregate at least – to be gaining in value.
The bellwether stock index, the MSCI EM index, is up 9.6 per cent from its low on February 5. EM sovereign bonds are yielding an average of 5.51 per cent, down 0.37 per cent since January 1. Local currency bonds are, in many cases, producing stellar returns sharpened by windfall currency gains. Indeed, some EM currencies are among the world’s best performers, with the Indonesian rupiah rising 7.81 per cent, the Brazilian real gaining 7.3 per cent and the Indian rupee climbing 2.8 per cent so far this year. Read more
Asian fund passport plans, to borrow the old cliché, are like London buses: you wait ages for one and then three come at once.
Wednesday’s announcement between the regulatory bodies of Singapore, Malaysia and Thailand to create a system for cross-border distribution of mutual funds was the third in the region this year. Read more
Strong regulation and transparency in the local financial market is ramping up investor confidence in South Africa’s Collective Investment Schemes or unit trusts, an industry body says, after the sector attracted net inflows of R47bn ($5.2bn) in the first quarter of 2013 – the second biggest quarterly net inflows ever. Read more
Ashmore Group, the London-based emerging markets specialist fund manager, is pushing to get ahead in the race to manage the money of increasingly-affluent EM savers.
On Friday it said it would open an office in Indonesia, which becomes the 10th country with an Ashmore base and the seventh EM. Clearly, the bulls at Ashmore think recent fears of possible bubbles in southeast Asian asset markets aren’t worth worrying about. Read more
Is Ashmore running out of road? The emerging markets fund manager, which on Thursday posted a 7.4 per cent drop in interim pre-tax profits, says not. But investors aren’t so sure. The shares dipped 1 per cent the news, which is nothing given the general flight out of EMs on the day.
But after doubling in 2009-10, in the recovery from the 2008 crisis, Ashmore shares have gained very little in the past two years. Clearly, investors need to be convinced that the group can find new ways of profiting from EM in the face of growing low-cost competition from index-tracking rivals. Read more
South African investors have been cautious about dipping into exchange traded products (ETPs), which hit the scene just over 10 years ago. Reservations about the passive nature of such products have been an issue for some. But attitudes are changing and the figures are ticking upwards. Read more
Aberdeen Asset Management on Monday published a fairly gloomy forecast for 2013, complete with a warning that investors aren’t likely to find much cheer even in emerging markets.
But the fund manager still backed equities over bonds, pointing out that despite the poor global economic outlook companies were generally in “very good shape”. Just a matter of picking the right stocks, we suppose. Read more
Given all the eurozone bad press, it is unusual to hear from a man who can’t wait for the day when his country enters into the single currency.
But, as a report in Monday’s FTfm explains, for one Romanian fund manager euro entry would usher in a future with more freedom. Read more
China is expected to double its assets under management by 2015, but before asset managers start anticipating a sales bonanza they should take note of some failings, notes Amin Rajan, chief executive of CREATE-Research, in a report in Monday’s FTfm.
The problem is not just the well publicised difficulties with breaking into the tightly controlled distribution market. The difficulty, says Rajan, lies with the investors themselves. Read more
Political leaders in the west have been keeping their eye on Beijing’s $3tn in foreign exchange reserves. If all else fails that amount of money could go a long way, they reason.
But Edward Chancellor, writing in Monday’s FTfm, says China’s forex reserves provide no shelter for anyone, least of all China. Read more
The fund management industry in China is a little dysfunctional, as we reported last week, but few claim they can see how to fix it. Which is why an item in Monday’s FTfm makes such interesting reading.
Robert Pozen, senior lecturer at the Harvard Business School, and Theresa Hamacher, president of the National Investment Company Service Association (NICSA), recently returned from the Beijing launch of their book The Fund Industry: How Your Money is Managed, which has been translated into Mandarin. Read more
Some anecdotal evidence on the mood among investors has come across our desks: a note from Benoit Anne of Société Générale entitled “EM investor survey: Investors are now extremely worried”.
Among the survey’s conclusions: “it is quite clear that the shorter-term bullish investor on GEM has virtually disappeared”. Read more
Not every fund manager has a comic book made about them. Mark Mobius, the legendary emerging markets investor, has. Published five years ago, our hero finds himself in Africa in the final chapter.
Fast forward to May 2012. Franklin Templeton Investments will launch the Templeton Africa Fund – offering investors a chance to access a “diversified portfolio of companies across countries and sectors with exposure to secular growth trends on the African continent”. It’s as if Mobius was sticking to the (comic) script all along. Read more
Fidelity Worldwide Investments, one of the world’s biggest mutual fund managers, has bailed out of the Indian market after making a loss every year since it went there in 2004.
It sold its India mutual funds business to the financial services arm of Larsen & Toubro, an $11.7bn Indian engineering and construction company, the companies said on Tuesday. Read more
Egypt numbers are hair-raising for investors. Since the beginning of the year its benchmark index has risen nearly 50 per cent, but those invested in Egypt stocks witnessed falls in the same index of 50 per cent in 2011. Investors must now assess whether a healthy recovery is underway or another crash is coming, as a report in Monday’s FTfm explains. Read more
If the current glow around the latest Greek rescue package leaves you feeling cold, a Polish economics professor may have just the investment vehicle for you: Eurogeddon, a fund aimed at making money in case the worst predictions for the eurozone come true.
Krzysztof Rybinski (left), a former deputy governor of Poland’s central bank who has since become an increasingly bitter critic of the government’s economic policies, on Tuesday announced the launch of his new fund in conjunction with Polish fund manger Opera TFI.