We profile some of the most interesting fund launches in recent weeks and examine the performance of a product already on the market.
EMERGING MARKETSUK-based fund manager Artemis has launched its first dedicated emerging markets fund, the Artemis Global Emerging Markets. The fund aims to achieve long-term returns through a combination of capital growth and income.
The fund will be managed by Peter Saacke and Raheel Altaf. Saacke has some previous experience of investing in emerging markets through his additional role as manager of the Artemis Global Growth fund.
The managers will use Artemis’s ‘SmartGarp’ stock-screening system to search a universe of around 2,000 emerging market stocks for those with undervalued growth prospects. Due diligence is then applied to establish whether the companies have strong fundamentals. The fund will invest in around 80-120 stocks and hold the MSCI Emerging Markets Index as its benchmark.
EQUITY ALTERNATIVESMan GLG, the discretionary investment management business of Man Group, has launched a new Ucits-compliant fund, the Man GLG European Mid-Cap Equity Alternative fund.
The fund will be managed by GLG Partners and the portfolio manager will be Moni Sternbach, who joined Man GLG from Cheyne Capital in January this year.
The fund aims to provide risk-adjusted returns through both long and short investments and an active portfolio management style. Stock selection will focus primarily on European securities with a market capitalisation of €500 million to €10 billion.
A MULTI-MANAGER APPROACH
At Hargreaves Lansdown, a multi-manager approach has been chosen to help make the most of investing in an area as diverse as the emerging and Asia Pacific nations.
According to the IMF, 70% of global growth is expected to come from emerging markets over the next few years and Hargreaves Lansdown expects Asian and emerging markets to show strong economic performance.
As a result, the firm has launched the new Hargreaves Lansdown Multi-Manager Asia and Emerging Markets fund, which will provide exposure to a wide variety of countries and companies. The firm says investors will gain diversified exposure from what it perceives as the best managers across Asia and emerging markets.
It will be managed by the Hargreaves Lansdown research team, who will choose and monitor what they believe to be the best funds in the region.
The firm acknowledges that Asian and emerging economies will face headwinds in the short term and advises investors to stay focused on the bigger picture. However, it expects the long-term outlook to be robust and contain many attractive opportunities for the managers of the fund, who are Roger Clark and David Smith. The fund is a unit trust.
Hargreaves Lansdown is a UK-based financial services provider and fund distributor.
CATASTROPHE BONDSCatastrophe bonds, which focus on natural catastrophe risk, can offer a number of advantages to investors. These include a very low correlation to other asset classes, which can provide diversification in a multi-asset portfolio, and a degree of protection against interest rate rises, an especially revelant factor in the current low-yield environment.
At asset manager Schroders, the Schroder Investment Fund Flexible Cat Bond fund has been launched, which can invest in the global cat bond market. The fund has the flexibility to invest up to 25% in private placement cat bonds, which enable investors to access a wider range of catastrophe risks from smaller issuers, and can also take tactical short positions to mitigate extreme event risks.
The Flexible Cat Bond fund can invest globally but its portfolio will be biased towards regions such as the US, Western Europe and Japan. It will target returns of cash (three-month USD Libor) + 6% per year over an insurance cycle.
ONE YEAR ONFirst State Investments has marked the one-year anniversary of its Emerging Market Local Currency Bond Fund, which has outperformed its reference index by 322 basis points.
The launch of the fund was an important part of First State’s plans to grow its global fixed income offering, providing investors with exposure to local currency-denominated fixed income securities.
The fund is actively managed by Manuel Cañas, deputy head of First State’s emerging market debt team, who uses a flexible investment process.
Paul Griffiths, chief investment officer, global head of fixed income and multi-asset solutions, says:“We are very pleased with the performance the team has been able to deliver, despite a negative environment for local currency emerging market debt in a period of US dollar strength.”
Helene Williamson, head of emerging markets debt, says the team expects global growth to be “solid but unspectacular” in the coming months.
“Against this backdrop, emerging markets fixed income looks attractive, despite lower commodity prices, with balance sheets remaining solid in most emerging countries, which is not fully reflected in market valuations,” she adds.
First State Investments had assets under management of $156.9 billion (€143.7 billion) as at December 31, 2014.
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