WHAT ARE WE LOOKING FOR?
The most rewarding emerging markets funds over five years.
Investors can get exposure to developing markets through a single-country, regional or broad-based investment fund. It's interesting to see whether narrow or broadly focused funds did better.
We screened various emerging markets funds for the biggest gainers over five years ended April 30. U.S. dollar, segregated, pooled and duplicate versions of the funds were excluded.
WHAT DID WE FIND?
The four Latin American regional equity funds emerged among the biggest winners. They outpaced most funds in the emerging markets and greater China categories.
TD Latin American Growth topped the list with a robust average annual return of 17.5 per cent over five years followed closely by Fidelity Latin America at 17.1 per cent.
Latin America has benefited from the boom in commodities, but TD Latin American Growth's performance stems from playing secular trends like the rising consumer class, says co-manager Scott Piper. The fund has had a "healthy exposure to commodities," but it has also benefited from owning consumer-oriented stocks like Brazilian and Mexican banks, Brazilian home builders and wireless telecommunications companies, he said.
It was 69-per-cent invested in Brazil and 22-per-cent in Mexico at the end of April. Latin American stocks have sold off recently amid concerns of a slowdown in China, inflation fears in countries like Brazil and an aversion to riskier assets as investors become rattled by Europe's debt woes, he said. "I am more upbeat about the relative upside of Latin America now than I was at the beginning of the year.... I think we are going to end up at much higher levels than where we are today."
AGF Emerging Markets, which is run by Patricia Perez-Coutts, came third with an average annual return of 16.5 per cent. Interestingly, it trounced Templeton Emerging Markets run by globetrotting manager Mark Mobius. His fund posted an annualized return of 8.2 per cent. "The outperformance [of the AGF fund] ... has been primarily due to strong security selection, outweighing any effects from country and/or sector positioning," Ms. Perez-Coutts said in an e-mail.
|How various emerging markets funds fared over five years|
|(As of Apr. 30)||Latest||% rtn (Apr. 30)||% Returns|
|Fund name||Asset ClassAssets ($-mil)||MER||5-yr||1-yr||2009||2008||2007||2006||2005|
|TD Latin American Growth||Miscellaneous||228.68||2.73||17.5||43.7||68.9||-44.0||17.4||47.3||46.5|
|Fidelity Latin America-B||Miscellaneous||67.83||2.44||17.1||34.4||62.1||-41.8||18.2||44.2||48.7|
|AGF Emerging Markets||Emerg. Mkts Eq.||996.14||2.98||16.5||43.2||60.3||-35.2||12.4||40.4||35.3|
|CIBC Latin American||Miscellaneous||33.29||2.95||15.3||52.4||75.2||-40.9||7.4||44.1||30.4|
|Renaissance China Plus||Gtr China Eq.||186.36||3.15||13.7||33.0||71.3||-37.0||28.6||51.8||-3.2|
|HSBC Chinese Equity-I||Gtr China Eq.||268.05||2.55||13.1||15.9||36.9||-43.4||35.0||80.3||7.2|
|Scotia Latin American||Miscellaneous||78.33||2.56||12.9||41.8||73.2||-52.4||15.0||43.8||44.0|
|Templeton BRIC CC-F||Emerg. Mkts Eq.||21.14||1.93||12.4||40.8||64.5||-48.5||37.2||52.4||6.2|
|Manulife China Opportunities Class||Gtr China Eq.||73.26||2.97||11.5||16.2||32.7||-39.3||24.2||72.9||8.8|
|Excel Chindia||Emerg. Mkts Eq.||113.66||3.38||11.4||33.9||47.7||-47.8||35.2||48.5||11.2|
|Excel India||Emerg. Mkts Eq.||290.40||2.98||11.4||51.6||57.0||-50.6||30.2||30.3||24.1|
|IG Mackenzie Univ Emerg Mkt Class-A||Emerg. Mkts Eq.||252.01||3.03||11.3||31.8||45.4||-40.1||15.7||31.4||34.6|
|Mackenzie Univ Emerg Markets Class||Emerg. Mkts Eq.||219.16||2.50||11.2||31.4||44.8||-40.4||14.4||32.9||34.9|
|CIBC Emerging Markets Index||Emerg. Mkts Eq.||135.81||1.35||11.2||27.4||42.3||-39.0||18.3||31.8||30.2|
|SEI Emerging Market Equity-O||Emerg. Mkts Eq.||166.15||0.20||10.5||36.0||51.1||-41.0||15.0||29.3||27.4|
|Omega Emerging Markets||Emerg. Mkts Eq.||186.37||2.85||10.5||30.3||50.9||-44.6||19.8||37.2||24.9|
|Brandes Emerging Markets Equity||Emerg. Mkts Eq.||159.70||2.57||10.3||54.8||79.5||-35.7||-1.0||27.4||15.5|
|AGF China Focus Class||Gtr China Eq.||274.81||2.99||9.7||11.7||27.7||-41.7||30.5||67.6||8.6|
|Excel China||Gtr China Eq.||95.85||3.19||9.5||21.6||43.4||-45.9||29.7||83.2||-4.8|
|CI Emerging Markets||Emerg. Mkts Eq.||180.82||2.59||9.3||32.2||51.3||-45.6||16.5||34.1||26.7|
|Fidelity Emerging Markets-B||Emerg. Mkts Eq.||43.94||2.86||9.3||37.4||50.7||-50.8||20.9||32.1||38.7|
|CIBC Emerging Markets||Emerg. Mkts Eq.||97.98||2.93||9.0||31.5||48.1||-33.5||5.9||25.8||20.7|
|TD Emerging Markets||Emerg. Mkts Eq.||215.92||2.73||8.9||30.0||41.2||-47.2||19.6||37.6||29.9|
|Templeton Emerging Markets||Emerg. Mkts Eq.||247.77||2.98||8.2||34.2||51.7||-43.5||16.4||25.0||23.3|
|Russell Emerging Mkt Eq Pool-A||Emerg. Mkts Eq.||8.2||36.0||60.6||-47.2||12.8||27.1||27.0|
|BMO Greater China Class||Gtr China Eq.||120.03||2.73||7.8||23.8||45.8||-47.5||38.2||47.4||-0.3|
|Renaissance Emerging Markets||Emerg. Mkts Eq.||19.02||2.90||7.4||30.7||46.2||-44.7||15.9||24.5||29.7|
|BMO Emerging Markets||Emerg. Mkts Eq.||136.43||2.52||7.1||36.4||46.8||-47.1||15.3||26.9||25.6|
|HSBC Emerging Markets-I||Emerg. Mkts Eq.||17.83||2.78||5.9||25.6||43.8||-48.8||18.5||27.3||26.2|
|MSCI Emerging Markets Free ($ Cdn)||12.6||37.9||52.0||-41.4||18.5||32.1||31.2|
|Source: Globe Investor|
© 2007 The Globe and Mail. All rights reserved.
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