Funds for Emerging-Markets Equity Shoppers

With emerging market returns trailing their developed peers this year, now might be just the time to consider one of these highly rated offerings

Adam Zoll 1 August, 2013 | 9:25AM Holly Cook
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An otherwise good year for equities hasn't been so rosy for emerging-markets stocks. Led by fears of slowing economic growth in China, but also dragged down by lacklustre returns in India and Latin America, emerging-markets equity funds have been among the few equity losers of 2013. As of July 29, the diversified emerging-markets equity category had lost 6% year to date. Meanwhile, China-region funds had dropped 2%, with the India and Latin America equity-fund categories each losing about 15%.

Despite a rough first half of 2013, diversified emerging-markets equity funds were up about 5% during the 12-month period leading up to July 29—nothing to write home about, but not horrible. But with the S&P 500 up 24% during that time, emerging-markets stock funds—which tend to be more volatile than their developed-markets counterparts—look like laggards by comparison.

It's the continuation of a story that's been going on for a few years now, with the category modestly outperforming the index in 2010 and 2012 but experiencing steep losses in 2011, producing a three-year annualised return of a measly 1.2%. (Morningstar's John Rekenthaler noted in a recent column that despite the lacklustre performance of emerging-markets stocks, investors have poured $140 billion into traditional mutual funds and ETFs investing in them during the past three years.)

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
AS SICAV I Em Mkts Eq A Acc USD98.56 USD0.66Rating
ASI Emerging Markets Equity A Acc935.98 GBP0.22Rating
Comgest Growth Emerging Mkts USD Acc47.22 USD-0.10Rating
SKAGEN Kon-Tiki A1,122.01 NOK-0.22Rating
Stewart Inv Glbl Em Mkts Ldrs A GBP Acc5.62 GBP0.01Rating
Stewart Inv Global Emerg Mkts B GBP Acc910.27 GBP0.25Rating

About Author

Adam Zoll  is an assistant site editor with Morningstar.com, the sister site of Morningstar.co.uk.

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