Top Emerging Market Investor to Replace Mark Mobius

Mark Mobius has stepped down as lead manager on the Templeton Emerging Markets trust - so who is his replacement and will they be the new champion of emerging economies?

Emma Wall 14 July, 2015 | 12:38AM

This article is part of the Morningstar's Guide to Emerging Market Investing. Click here to find out just what an emerging market is and which regions hold the potential to boost your investment portfolio. 

 

 
 
 

Emma Wall: Hello and welcome to the Morningstar series, "Ask the Expert." I'm Emma Wall and I'm joined today by Morningstar's Jeremy Beckwith.

Hi, Jeremy.

Jeremy Beckwith: Good morning.

Wall: So, we're here today to talk about emerging markets funds. We're running an Emerging Markets Week this week and rather timely by coincidence Mark Mobius, probably one of the best well-known investors in this sort of stock market has actually announced that he is stepping down as lead manager on the Templeton Emerging Markets Trust (TEM). He has held that position for quite some time, hasn't he?

Beckwith: That's right. At launch, he was the lead manager and that was in 1989, so it's well over 25 years now, so quite some record. I think it's fair to say – he was well over 50 when he did that, so he is not a young man. So, it's quite right that he steps down at this point I think.

Wall: Over that time he has made a significant amount of money for investors. He is one of the few people who have seen both the Asian financial markets crash and indeed the global recession and then the more recent taper tantrum. So, he has seen really complete market cycles and invested money through those. Although the last five years have been a bit more tricky for him, haven't they?

Beckwith: That's right. There is a very strong value orientation to the whole approach at Templeton, goes back to Sir John Templeton all those years ago and that held them well during all those various bear markets, as you say, and there is also the tech crisis at the beginning of the century.

The last five years have not been so good for Templeton's performance and there have been a few doubts expressed, perhaps that's a slight illusion a touch, but it is a very well-resourced and large team that they've built there and the long-term record is still very, very good.

Wall: So, investors shouldn't panic about him stepping down because it's more sort of to the side and down a bit, isn't it? It's not sort of leaving the building?

Beckwith: That's right. He is stepping down as the lead manager on the Trust but he will still remain one of the portfolio managers on the team running the Trust. They are bringing in a new lead manager who is relocating to London from Turkey who is a very experienced and long-standing member of the Templeton team.

Wall: Putting that fund aside then because as you said, it's not had a great five years and as a result, it's not one of the higher-rated ones by our analysts here at Morningstar. Perhaps, you could highlight a couple of fund managers who we do think are the best of bunch starting with an open-ended fund.

Beckwith: So, on the open-ended side, we like the Lazard Emerging Markets Fund. James Donald is the manager there. He has led the emerging markets teams in Lazard since 2001 and been the lead manager of the Trust since 2008, very consistent record, like Templeton has a value approach to markets, but has done a steadier sort of pattern of performance, so we are very comfortable with that on the open-ended side.

Wall: Fantastic. What about on the closed-end side?

Beckwith: On the closed-end side, there is a little bit less choice. We like the JPMorgan Emerging Markets (JMG) investment trust, again a large fund but this is a quality growth approach, so a different style of investments to what Templeton and Mobius have done, but I think JPMorgan like Templeton have a very large global team of analysts and portfolio managers in emerging markets and so particularly well-resourced I think and that's a Bronze-rated investment trust.

Wall: I think emerging markets is one of those sectors where resource really is everything because they are not as transparent; they are not as efficient as developed market equities. We can go on to the Internet or indeed on to our own site and find out a lot of information about a stock listed, for example, in London or in New York. However, if you're thinking about a more obscure region, a smaller Asian country, having resource that we can really dig out those gems is important.

Beckwith: I think that's right and having people on the ground in those countries who understand how business works in those countries I think is very valuable. I think you get a lot more information by doing that. So, being well-resourced teams within emerging markets I think are very useful.

Wall: Jeremy, thank you very much.

Beckwith: Thank you.

Wall: This is Emma Wall for Morningstar. Thank you for watching.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
JPMorgan Emerging Markets Ord846.80 GBX-0.26
Lazard Emerging Markets Retl Inc2.74 GBP1.05
Templeton Emerging Markets Inv Trust Ord694.00 GBX-0.43

About Author

Emma Wall

Emma Wall  is Web Editor for Morningstar.co.uk.