EM funds bounce back

EM funds bounce back

Those who sold emerging market funds when China’s markets plunged on Black Monday may have missed out on a double-digit recovery, said Patrick Enright, analyst at Financial Express.

The negative sentiment over the last few weeks appears to have cooled, Mr Enright said, with commodity prices bottoming out, dollar strength firming and EM inflation forecasts picking up, so funds have had a chance to recoup some of the losses.

Since 24 August, the Investment Association’s Global Emerging Market sector has returned 6.65 per cent, with seven funds making double-digit returns.

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Top was NFU Mutual’s Global Emerging Markets with nearly 12.5 per cent over the past seven weeks. Marlborough Emerging Markets was in second place, with 11.11 per cent since Black Monday.

Adviser view

Stephen Womack of Cliftonville, Northampton-based IFA David Williams Chartered Financial Planners, said: “Advisers can choose to use specialist or global funds to achieve exposure to these dynamic economies.

“We use emerging market funds and did not panic-sell earlier in the year. This is because we will tend to take long-term positions for pension investments for clients, for instance.”