Ed Moisson uses the Lipper Leaders scoring system to analyse the best performing Global Emerging Markets funds.
Emerging market funds may still be viewed as too exotic for some retail investors, but such funds continue to rise in prominence, and particularly those willing to stay invested for the long-term have been drawn to the sector in ever-growing numbers. So which fund managers have the best records?
The two biggest funds in this arena are the Aberdeen Emerging Markets fund, with £3.7 billion in assets, and First State Global Emerging Markets Leaders, with £3.4 billion. Of course size is not everything, and the smaller First State Global Emerging Markets (£750m) stands at the top of the best performers over the past year. As an aside, it is interesting to see that all of the funds in this list have seen their 1-year performance records boosted by returns achieved over the most recent six months.
First State Global Emerging Markets, managed by Jonathan Asante and Glen Finegan, is also unique in being able to boast a ‘hat trick’ of highest Lipper Leader ratings over the past five years. Not only is it among the best funds for its total return over this period, but also for its risk-adjusted performance relative to other emerging market equity funds (the Lipper Leader rating for consistent return).
Aberdeen Emerging Markets and BlackRock Emerging Markets funds join First State in achieving the best Lipper Leader score for consistent returns over five years. Rounding off First State’s success are their funds’ standing as Lipper Leaders for Preservation too: the funds’ ability to minimise losses when compared with other equity funds (not just emerging markets). This is all the more impressive given the likelihood of greater volatility in emerging markets.
A helpful reference point is the MSCI Emerging Markets Total Return index: up 7.5% over 1 year, 25.6% over 3 years and 40.8% over 5 years. With Aberdeen and First State’s funds in the current list each returning around 90% over 5 years, such impressive returns are hard to ignore.
This article originally appeared in the March 2013 edition of ‘Investment Life & Pensions Moneyfacts’ magzazine.