3 Biggest and Best Emerging Markets Funds

Emerging markets investors have been rewarded over the recent past, with the MSCI EM index outperforming the global index in both 2016 and in 2017

Simon Dorricott 3 July, 2017 | 3:13PM
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3 Top Performing Emerging Market Funds

The top performing funds over the past three years include both growth- and value-biased approaches, reflecting recent market conditions.

Hermes Global Emerging Markets focuses on identifying high quality companies that exhibit attractive growth, momentum and valuations. The latter highlights the strategy of buying companies when they trade at a discount to fair value, thus providing a margin of safety. However, the overall portfolio will tend to show growth and quality characteristics in terms of relatively high P/E and return on invested capital, while debt levels are generally slightly lower.

ESG assessment is part of the process and the fund scores an Above Average Morningstar Sustainability Rating. The manager, Gary Greenberg, is an experienced investor and has been at Hermes since 2010. He prefers to run a portfolio of 50-75 holdings and has the flexibility to allocate across regions to reflect the best opportunities. As at 31 March 2017 there were clear biases of around 10 percentage points to IT and consumer discretionary relative the benchmark, while country-level deviations were slightly more muted at 4.4 percentage points overweight to India and a 5.4 percentage points underweight to South Korea.

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Simon Dorricott  is a Senior Fund Analyst for Morningstar

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