InvestmentsDec 1 2014

Allianz considers calling time on Bric Stars concept

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Allianz Global Investors looks set to abandon the idea behind its £272m Bric Stars fund as it considers formally broadening the investment mandate.

The fund was launched amid much fanfare in 2006 for manager Michael Konstantinov and sought to invest in the best ideas in Brazil, Russia, India and China – a set of markets coined the ‘Brics’ by Goldman Sachs’ Jim O’Neill in 2001.

The fund has returned 64.09 per cent since inception, underperforming its benchmark, which has returned 74.24 per cent. (Its benchmark is a yearly rebalance of 25 per cent of each of the respective Bric countries’ MSCI indices.)

“We are considering expanding the investment remit of the Allianz Bric Stars fund to allow it to invest in other emerging markets,” the company said.

“The rationale for any such change would be to give the fund scope to capture the very best investment opportunities across a broader set of markets.”

The fund was taken over by Kunal Ghosh in October 2013, who began shifting some of the portfolio outside the four countries but now looks set to be given an even broader remit.