The Aberdeen Global Emerging Markets Smaller Companies Fund is managed by a team with a buy-and-hold investment approach, so the positioning of the portfolio has changed little over the past year.
We recently caught up with Devan Kaloo, Aberdeen's Head of Global Emerging Markets, who provided us with a brief update.
- The decline in the oil price held back the performance of emerging markets towards the end of 2014. Yet this should ultimately prove a positive for the emerging world as a net importer of oil. Some governments are removing costly fuel subsidies and these cost savings can be invested in other areas of their economies, such as infrastructure.
- Brazil remains the fund's largest country weighting, which the team believes offers a deep market of quality companies trading on attractive valuations. They have tended to avoid Taiwan, where they feel the bulk of businesses are in highly economically-sensitive industries and where corporate governance is generally poor.
- New positions include Egypt-based Juhayna Food Industries, which has a good market position, robust distribution network and leading brands, according to the team.
Performance
The past couple of years presented a challenging environment for emerging markets investors. This fund has underperformed the wider market over the past two years; however, over the longer term, the team's long-standing investment approach has seen the fund in good stead. Since launch in March 2007, it has returned 134.3%* against 94.9% for the MSCI Emerging Markets Small Cap Index. Please remember past performance is not a guide to future returns.
| Annual percentage growth | |||||
|---|---|---|---|---|---|
| Apr 10 -
Apr 11 |
Apr 11 -
Apr 12 |
Apr 12 -
Apr 13 |
Apr 13 -
Apr 14 |
Apr 14 -
Apr 15 | |
| Aberdeen Global Emerging Markets Smaller Companies Fund | 20.7% | 4.7% | 24.9% | -16.1% | 7.5% |
| MSCI Emerging Markets Small Cap | 12.7% | -13.1% | 15.1% | -7.3% | 13.9% |
Past performance is not a guide to future returns. Source: Lipper IM* to 01/04/2015
Our view on this fund
To keep the fund a manageable size and protect underlying investors, Aberdeen has sought to restrict inflows into the fund. The fund therefore does not feature on the Wealth 150, our favourite funds across the major sectors. However, we continue to hold the team in high regard and we favour their approach of seeking high-quality businesses at reasonable valuations. The fund's allocation to higher-risk smaller companies and exposure to emerging markets adds risk, so it should be held with a long-term view.
Please note as an offshore fund investors are not normally entitled to compensation through the UK Financial Services Compensation Scheme.
Find out more about this fund including how to invest
Please read the key features/key investor information document in addition to the information above.
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