Which three EM funds made a return?
Only three emerging market funds, just 6.5% of the sector, have reported positive returns over the year to 30 April, according to data.
According to FE Analytics, within the Australian Core Strategies universe, there were 53 funds in the emerging markets sector and 47 which had a one-year track record.
Only three of these funds had reported positive returns over one year to 30 April, 2020. The average performance by the emerging markets sector over the period was losses of 6.8%.
These funds were the $146 million Fidelity Global Emerging Markets fund which returned 1.6%, $117 million GQG Emerging Markets Equity which returned 1.45% and the $3.7 billion Northcape Capital Global Emerging Markets fund which returned 1.27%.
Performance of three funds versus emerging market sector over one year to 30 April 2020
Popular country allocations in these funds included India, Taiwan and China with the GQG fund in particular holding 34% to China and 17% to India. Top holdings included Taiwan Semiconductor, AIA and Alibaba.
Alex Duffy, manager of the Fidelity Global Emerging Markets fund, said: “Importantly, EM equities continue to trade at attractive valuations, with even traditionally more expensive markets, such as India, seeing their premium to the wider EM Asia region collapse.
“The long-term investment case for EM equities remains strong, supported by structural growth drivers. These should drive demand for different goods and services in underpenetrated markets.”
The worst-performing funds in the sector were $475 million Dimensional Emerging Markets Trust which lost 17.6% and $11 million CFS Stewart Investors Wholesale Global Emerging Markets Leaders which lost 17%.
However, since the start of the year to 30 April, 2020, there were no funds in the sector which had reported positive gains. The best-performing fund was the aforementioned GQG and Northcape funds which lost 4.6% and 6.2%.
AUTHOR
Laura Dew
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