Ashmore launches Emerging Markets Frontier Blended Debt fund
Sub-fund of Ashmore SICAV UCITS fund
Sub-fund of Ashmore SICAV UCITS fund
Fund house partially attributes resilience to investors’ small EM allocations
The risk of a trade war between China and the US has fuelled investor uncertainty. One fund selector has dropped their only China equity focused fund while another portfolio manager has reduced his China allocation.
There is a clear opportunity to buy emerging market assets whenever risk averse events are triggered in the developed markets, and current worries over US trade policy and rate hikes could signal the latest entry point, says Ashmore’s Jan Dehn.
Emerging market fundamentals remain robust in the opinion of many European fund buyers who say a market correction has increased the appeal of the asset class, according to Last Word Research.
European-domiciled emerging market (EM) funds have seen a spectacular turnaround in fortunes at the start of 2018 with inflows up €14.5bn during January to reach a total €11.4bn of assets under management after there were €3bn of outflows in December, according to Morningstar data on global categories.
After several tough years, things have been looking more positive for investors in emerging markets over the last couple of years, with the region outperforming its developed market peers in both 2016 and 2017.
Frontier market funds are leading Europe’s emerging market fund pack with Charlemagne’s frontier market offering at the top, according to FE Analytics.
Emerging market debt has been the best-selling asset class with European investors this year. But flows turned negative in late September against a backdrop of a hawkish Fed and a strengthening dollar.
Has the run into emerging market bonds only just started, or have flows already reached saturation point? And what does that mean for the outlook for the asset class?
With a string of countries having been promoted from frontier markets to emerging market status by index provider MSCI in recent years, investors need to ask themselves the question: are frontier markets still a viable asset class? And if they aren’t, is that actually a problem?
Amid the political turmoil, Brazil has done well for fixed income investors, but questions remain around further volatility.