Investing in Asian and emerging markets can give you access to a broad range of countries. From big Asian countries such as India and China to South Africa and Latin America, these regions offer a range of countries at different stages of economic development. Some are rich in commodities and natural resources, some rely on exporting goods to Western economies, and others have vibrant local consumer-driven growth.
These markets have grown rapidly in recent decades. As young, emerging economies, they tend to offer greater growth opportunities than the West. This comes with higher investment risk and more volatility though.
Funds investing in the region have different areas of focus:
- Emerging markets funds – offer broad exposure to global emerging economies, from Brazil to Malaysia and India to Turkey
- Asia ex Japan funds – invest exclusively in Asian markets, such as China and the Philippines. Some focus on mature economies, including Hong Kong, Singapore and Australia
- Regional funds – others focus on a specific region such as Latin America, including Brazil and Chile
- Country funds – these funds mainly focus on individual countries, such as India or China
Asian and emerging markets have gone from strength to strength. Rapid industrialisation, growing populations, and a desire to succeed have helped transform developing countries into economic superpowers. Domestic consumption is set to be a key driver of growth over the coming years, helped by a young and growing population, and rising wealth.
These countries have also become hotbeds of innovation. Some countries are at the forefront of technology and many companies located there are overtaking Western competitors.
In recent years these markets have had to contend with the COVID-19 pandemic, war, and other geopolitical risks. It’s a reminder the path to economic prosperity can be unpredictable and volatile at times.
Asian and emerging countries are quite different from each other, so this part of the world can be home to both the best and worst-performing global stock markets at any one time. That’s why we think a diversified approach is sensible when it comes to investing in these markets.
If you’re looking to invest in emerging markets and are happy with the higher risk associated with doing so, we think a broad global emerging markets or Asian fund is likely to be a good starting point. Other funds could then be added to a portfolio for additional exposure to a particular theme, area, or country.
Please remember past performance is not a guide to future returns. Where no data is shown, figures are not available. This information is provided to help you choose your own investments, remember they can fall as well as rise in value so you may not get back the original amount invested.
Please note all these funds invest in emerging markets, which increases risk.
The fund reviews below are provided for your interest but are not a guide to how you should invest. For more information, please refer to the Key Investor Information for the specific fund. Remember all investments and any income from them can fall as well as rise in value so you could get back less than you invest. Past performance is not a guide to the future.
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Wealth Shortlist fund reviews
This fund invests in a wide range of Asian markets, including both established and less-developed economies such as China, India and Taiwan. This means it could provide broad exposure to the Asia Pacific region and help diversify a global portfolio with a long-term view.
abrdn is home to one of the most experienced teams investing in Asian companies. Hugh Young is Chairman of Asia Pacific at abrdn. He was instrumental in setting up the group's Asian equities strategy, including the launch of this fund in 1987. While he no longer makes the day-to-day decisions over the construction of the fund, he carries out research that can be used by the team and we view it positively that he's still a part of the wider team. Flavia Cheong is Head of Asia Pacific Equities and leads the team of five directly looking after the fund, with key input into its final construction.
Companies in good financial health, run by robust and trustworthy management teams are favoured by the team. They often look for a change that could help boost profits in future, such as a new product or change in the use of technology. They sometimes invest in out-of-favour companies that can be bought at a more attractive share price.
This fund invests in developed Asian economies, such as Singapore and Hong Kong, as well as emerging countries including India and Taiwan. The managers try to achieve steadier returns compared with others in the Asia sector, so the fund could fit with other Asian funds that use a different or more adventurous investment approach, or form part of a broader global portfolio with a long-term outlook.
Martin Lau is the fund's lead manager. He's one of the industry's most highly regarded Asian fund managers and has invested in the region for more than two decades. He has an excellent long-term track record and runs the fund in a conservative way. This means the fund may hold up better than some other Asian funds when markets are rocky but lag when markets rise strongly.
This fund focuses on the Greater China region, and invests in companies based in, or that carry out most of their business in, China, Hong Kong or Taiwan. It could form part of a broader global portfolio or diversify the Asian and emerging markets equities portion. China has long-term growth potential, though a fund focused on a single emerging country is a high-risk option so investors should expect volatility and it should only make up a small portion of an investment portfolio. While it mainly invests in larger companies, the fund can also invest in higher-risk smaller companies.
This fund is run by a manager and team with a great pedigree of investing in China. Martin Lau has a long track record investing in China and also has the support of other experienced investors. We like the team's culture and philosophy - they view themselves as stewards of investors' capital, looking after it as though it's their own.
Lau and his team are conservative in the way they manage money, and they aim to limit losses in a falling market. They do this by investing in companies they think will see consistent demand for their products or services and prosper over the long term, rather than chasing short-term fads.
This fund aims to track the performance of the broader emerging stock market, as measured by the FTSE All-World Emerging Index. It's currently made up of around 1,800 companies, and is focused towards sectors such as financials, technology and consumer-related businesses. A small part of this fund invests in smaller companies which are higher-risk than their larger counterparts.
The fund invests across emerging countries, including China, India and Taiwan. We think it's a convenient way to invest in the emerging markets, and could be used as a way to diversify a long-term, global investment portfolio.
This fund aims to track the performance of the broader Asian stock market, as measured by the FTSE World Asia Pacific ex Japan Index. It's currently made up of 632 companies, and is focused towards sectors such as financials and technology businesses.
The fund invests across the Asia Pacific region, which includes developed countries such as Hong Kong, Singapore, and Australia, as well as less mature economies like Taiwan and Malaysia. We think the fund's a convenient way to invest in Asian markets, and could be used to diversify a long-term, global investment portfolio.
This fund provides broad exposure to the emerging markets, which makes it a more adventurous way to try to grow your wealth over the long term. It could help diversify a global portfolio focused on long-term growth, and sit well next to funds that mainly invest in developed markets.
Leon Eidelman is lead manager of this fund, alongside co-manager Austin Forey. While the managers have plenty of experience investing in emerging markets between them, they also draw on a well-resourced team for ideas and analysis. They look for high-quality companies they believe can sustain earnings growth over the long term.
This fund aims to pay a regular income and grow an investment over the long term. It could form part of an income portfolio or help to diversify the Asian portion of a global portfolio. If the income is elected to be reinvested, it could boost future growth potential.
Jason Pidcock is one of the first UK fund managers to run an Asian fund focused on income, rather than purely growth. He set up his first Asian income fund in 1995 and has since built a strong reputation in this space. The manager likes to keep things simple and looks for companies that pay an attractive income and have the potential to grow dividends over time. Companies that make plenty of cash, have low levels of debt and are in good financial health are favoured. They should also be run by robust management teams and having regular contact with them is key to the manager's process.
This fund invests in a fairly small number of companies, which increases risk. Its charges are taken from capital, which could boost income but erode the potential for capital growth.
This fund invests in the Indian stock market, with a focus on small and medium-sized companies. India has excellent long-term growth potential, though a fund focused on a single emerging country is a high-risk option so it should only make up a small portion of an investment portfolio. This fund could sit well alongside those that invest across the globe or more broadly across Asia. Investments in smaller companies could boost growth but are also higher risk, so a long investment outlook is essential.
The managers use a GARP (Growth at a Reasonable Price) investment philosophy. This means they look for companies that grow their earnings consistently, and whose shares can be bought at a price they don’t believe reflects this earnings potential. This might be because the company is currently out of favour with other investors. Once this potential is recognised by more investors, the share price could rise. This, combined with investments in smaller businesses, means the fund can look quite different to its benchmark and peers, and so too can performance.
This fund aims to provide growth by investing in larger companies across Asia, based in countries such as China, Taiwan and South Korea. It could fit a broader investment portfolio that can have some exposure to a more adventurous fund, which includes higher-risk emerging markets and smaller companies, in the pursuit of long-term growth. The fund could be used as part of a globally diversified portfolio and provide key exposure to Asian markets. The potential use of derivatives also increases risk.
Richard Sennitt took over lead management of this fund in 2021, with support from Abbas Barkhordar. Sennitt is an experienced manager, having joined Schroders in 1994 to cover Far Eastern markets. Barkhordar joined Schroders in 2007 and has since been an analyst on the Emerging Markets Equities team. The new fund managers use the same long-standing investment process used by previous manager Matthew Dobbs and continue to work closely with the wider Asian Equities team.
This fund invests in smaller businesses that are based in Asian and emerging markets, or make most of their money in these areas. Smaller and more innovative businesses offer lots of growth potential, but they're higher risk because they're at an earlier stage of their development. The fund could therefore be used in a portfolio that's in search of higher potential long-term returns but can accept more volatility. We think it could fit well with Asian and emerging markets funds focused on larger firms but should only form a smaller part of an investment portfolio.
Robin Parbrook and Alex Deane co-manage this fund. Parbrook is an experienced manager, having joined Schroders in 1990. Deane has less experience, though worked closely with previous manager Matthew Dobbs after joining Schroders in 2015.
This fund focuses specifically on the Indian Subcontinent, with the aim to provide long-term investment growth. It mainly invests in Indian companies, though it can also invest in Pakistan, Sri Lanka and Bangladesh. We think the fund could sit well alongside those that invest across the globe or more broadly across Asia. India has excellent long-term growth potential, but a fund focused on a single emerging country is a high-risk option so it should only be considered as a small portion of an investment portfolio.
Sashi Reddy and David Gait manage the fund. They are both highly experienced fund managers in Indian and Asian equities. We like their focus on stewardship, sustainability and high-quality companies. They like cash-generative businesses, which are in good financial health which they think could withstand periods of economic volatility. The managers also put emphasis on businesses' people and culture, and only invest in companies they believe are run by management teams with integrity. They also invest in some smaller companies, which are higher risk than their larger counterparts.
Latest news on this sector
Henry Ince | 15 November 2023
We look at what’s happened across Asian and emerging economies, how stock markets have fared and how our Wealth Shortlist selections have performed. Read article.
15 November 2023 | 7 min read
Please note the research updates are not personal recommendations to trade. If you are unsure of the suitability of an investment for your circumstances please seek advice. Remember all investments can fall as well as rise in value so investors could get back less than they invest.