Moneyspider in the News

Emerging market funds power ahead

Reuters 

Emerging market funds have produced up to six times higher returns than their leading mainstream counterparts over the past five years, data shows. 

The top-performing Asia Pacific (excluding Japan) fund, Gartmore China Opportunities, has gained £26,850 on a £5,000 investment five years ago - a staggering 537 per cent rise - according to independent online fund ratings provider moneyspider.com 

Jupiter Emerging European Opportunities has produced similarly strong growth of £23,950 on the same investment. The fund, which mainly invests in Russia, Turkey and Poland, has consistently outperformed the emerging markets sector benchmark, and is rated A on the Moneyspider scale. 

Meanwhile, the top mainstream North American and western European funds have lagged far behind. Martin Currie North American fund, the top fund in that geographical sector, has made just £4,350 on a £5,000 investment five years ago, while Artemis European Growth, the leading Europe (excluding UK) collective investment, has grown by £11,600. 

Moneyspider ranks funds on a scale of A to E and not a single emerging market fund is currently rated below B.  

Director Tony Ahearne said that fact 'speaks for the strength of the sector as a whole'.  

He said emerging markets have come along way since their inherent difficulties in the 1990s. 

'Improved political stability in many hitherto no-go parts of the world combined with rising exports and a higher degree of economical autonomy have manifested themselves in the strong performances of the funds,' he said. 

'Earnings growth expectations for emerging markets have been moving up while those in many developed markets have been moving down.' 

'It would appear that investors may be focussing less on risk and more on growth.' 

However, Ahearne warned that, although emerging markets have proved strongly resilient to the recent credit crunch and stock market volatility, they remain 'high-risk, high reward' and only suitable as long-term investments. 

Moneyspider monitors and ranks the 2,000 unit trust and open-ended investment companies available to British retails investors and rates them against funds in the same sector, all funds, return on the FTSE 100 and cash yields.