Emerging Market Funds Launched Amid Slump

NEWS YOU CAN USE: New options for investors this month include German ETFs, frontier market and commodity funds

Emma Simon 26 July, 2018 | 12:16AM

Vanguard has launched a new ETF which tracks the German DAX index

This month saw fund lunches, fund mergers and one investment trust scrap fund fees. Fund launches targeted companies in Asia, Latin America and Africa, commodities and fixed income.

Elsewhere there was also a new ETF tracking the largest German firms and on the more esoteric front, there were also plans to re-launch an investment trust that invests in music royalties.

Janus Henderson has continued to streamline its fund range, following the merger of the two investment houses last year. And Hearthstone has renamed its residential property fund in a bid to attract more interest from private investors.

Vanguard Launches German ETF

Vanguard has launched a new ETF which tracks the German DAX index. This index tracks the 30 largest companies listed on the German stock market, which includes car manufacturers Volkswagen (VOW) and BMW (BMW), electronics giant Siemens (SIE), financial company Allianz (ALV) as well as pharmaceutical giant Bayer (BAYN).

The ETF will have a charge of 0.1%. It has been launched to coincide with the 30th anniversary of the DAX index.

Somerset Launches Frontier Fund

Emerging market specialist Somerset Capital Management has launched a new frontier markets fund. This fund, which will be managed by George Birch Reynardson, will invest in a portfolio of 40 to 50 companies across Asia, Eastern Europe, the Middle East, Africa and Latin America.

Reynardson, who is a partner in Somerset Capital Management, says the fund will include both growth and value stocks.

He drew parallels between frontier markets now and emerging markets in the 1990s and said they offered “compelling investment opportunities”.

Reynardson will be supported by fund manager Mark Asquith and senior analyst Kumar Pandit.

RLAM Launches Monthly Income Bond Fund

Royal London Asset Management has launched a fixed income fund-of-funds, designed to generate a monthly income stream. The Monthly Income Bond Fund will be managed by RLAM’s head of fixed income Jonathan Platt.

The investment remit is to offer higher yields without compromising on risk management.

Platt says: “This fund allows us to translate RLAM’s credit philosophy with a strong emphasis on active management, rigorous analysis of fundamentals and genuine stock selection into a flexible and diversified new offering.”

Lazard Launches Commodities Fund

Lazard Asset Management is launching a new global commodities fund. This fund will invest in futures as well as commodity-related stocks, and will be managed by Terence Brennan, who heads up the commodities team.

The fund will be actively managed, and benchmarked against the Bloomberg Commodity Total Return Index. The team can allocate a maximum of 50% to commodity stocks.

Lazard says it was keen to launch a commodities fund as an effective hedge against inflation and rising interest rates.

New IPO Music Trust

Music moguls are hoping it is third time lucky for the float of a new investment trust that invests in music royalties. The Hipgnosis Songs Fund initially sought an IPO in July last year. This was then delayed for three weeks before being postponed indefinitely.

But the trust has now announced it is looking to raise £200 million by listing on the specialist funds segment of the London Stock Exchange this summer.

The trust was set up by Merck Mercuriadis – a former manager of Beyonce, Guns N’ Roses and Elton John. The trust aims to deliver both income and capital growth for investors by acquiring a catalogue of the rights to songs, which it hopes will generate royalties as well as capital appreciation over time.

Hearthstone Renames Property Fund

Hearthstone’s UK Residential Property Fund will now be rebranded as the TM Home Investor fund.

The fund will continue to managed by Alan Collett and invest in residential flats and houses across most parts of the UK. Hearthstone says name change is part of a wider rebranding exercise designed to increase appeal among direct investors.

Baillie Gifford Waives Fees

Baillie Gifford has confirmed it has taken over the mandate on the Schroder UK Growth Trust which been renamed the Baillie Gifford UK Growth (BGUK) trust.

As part of this change Baillie Gifford has agreed to waive six months of management fees.

The trust will now be co-managed by Iain McCombie and Milena Mileva. The board of the trust said it felt the change of name and management “should enhance appeal”.

Janus Henderson Merges Funds

More fund mergers have been announced at Janus Henderson, with the investment house set to merge its World Select Fund with the Global Equity Fund in September.

Janus Henderson said there were a number of “key similarities” between the investment objectives of the funds. This merger is subject to investor approval. The combined fund be managed by Ian Warmerdam who has run the Global Equity Fund since 2009.

 

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Allianz SE176.40 EUR1.39
Baillie Gifford UK Growth164.50 GBX1.54
Bayer AG64.33 EUR2.35
Bayerische Motoren Werke AG72.77 EUR1.95
Janus Henderson Global Equity Acc3,085.09 GBP0.69
Janus Henderson World Select I Acc  -
Royal London Monthly Income Bd M GBP Acc100.10 GBP-0.10-
Siemens AG99.51 EUR1.64
TM Home Investor C141.60 GBP0.07-
Volkswagen AG148.20 EUR3.56

About Author

Emma Simon

Emma Simon  is a financial journalist, specialising in investment and consumer issues, writing for Morningstar.co.uk