Emerging Markets Masters Fund leads peers with strong 2015 performance
James Brown
Emerging Markets Masters Fund (EMF) has delivered an exceptional 2015 calendar year performance, ranking number one for all emerging market equity funds available to retail investors in Australia.
In a challenging year during which the MSCI Emerging Markets Index lost 4.7 per cent, the Fund generated a positive net tangible asset (NTA) total return of 3.9 per cent[1], outperforming the Index by 8.6 per cent.
According to Morningstar[2] data EMF outperformed similar funds in a very strong showing. Portfolio Manager, James Brown attributes much of this outperformance to the Fund’s benchmark agnostic investment philosophy and process. This includes meaningful positions in China A-Shares and India—both major contributors to the strong performance in 2015.
“A vast majority of the managers we invest with are not available to Australian retail investors and that can be a powerful advantage for our investors. We are always willing to back our research-driven investment process, including having a strong bias towards the consumer sectors, exposure to domestic China, and a large position in India.”
He adds: “While we are pleased with the outcome of our asset allocation decisions in 2015, it is also very positive to see that manager selection also contributed meaningfully in the majority of markets that we invest in.”
EMF has further cemented its solid foundations by showcasing NTA total returns of 33.9 per cent (9.4 per cent per annum) since its launch in October 2012, compared with total returns of 20.2 per cent (5.8 per cent per annum) for the MSCI Emerging Markets Index.
“This is an excellent result for our investors and another outstanding 12 months for the Fund.” says Mr
Brown.
“The Fund has been positioned to leverage the growth of the emerging markets consumer since launch,
and it expressed this view through a meaningful exposure to frontier markets and significant weightings to
consumer sectors. We believe this approach has really differentiated us from most of our peers.”
He expects volatility in emerging markets to continue, particularly as a result of geopolitical concerns, but
believes there are still very exciting opportunities in these fast growing markets.
“Emerging markets continue to exhibit superior growth rates to developed economies as consumer wealth
and consumption continues to grow. Going into 2016 we expect volatility to be challenging in all markets,
however, we remain optimistic about the medium-term outlook for investing in emerging and frontier
markets and particularly for the managers whom we have invested with.”
Mr Brown adds that for investors to generate attractive returns in these markets they must look beyond the
relevant stock market indices.
“This is integral to our strategy. Two-thirds of our underlying stock positions are not included in the relevant
index, and for this reason our portfolio differs markedly from MSCI Emerging Markets Index. As a result,
our performance will differ significantly from the Index over time, and, whilst there may be volatility, I expect
our differentiated approach to generate strong returns for unitholders over the longer term.”
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