How to invest with the rising stars of emerging markets

As the veterans of emerging market investing retire, who are the fund managers you can rely on? MAIKE CURRIE picks the best of the rising emerging market investors.

Investing in emerging markets is not for the faint-hearted. 

While these markets have a lot going for them – abundant natural resources, young populations, a rising middle class, the bulk of the world’s population and superior growth prospects, they also come with a good dollop of risk. 

Investors need to stomach heightened volatility, geopolitical risk and the corporate governance issues that often come with investing in the region. 

Old Mutual Asia Pacific Fund is managed by Ian Heslop

Despite all of this, Asia is still chronically under-owned by global investors. As a consequence the region is relatively cheap, with the exception of India which remains the destination of choice for investors.

The Stewart Investors Asia Pacific Leaders Fund, once managed by Angus Tulloch who officially retired in September this year, is a top performer in this space. 

David Gait took over the reins of the flagship fund from Tulloch back in 2015, and alongside co-manager Sashi Reddy, has managed to keep performance on course. 

The common thread linking investments in this fund is that each has a high degree of ‘social usefulness’ – they provide goods and services that society actually needs. 

This makes the portfolio resilient in the face of change and means investors can rest easing knowing the fund invests in sustainable businesses committed to a sustainable future.

Another fund worth taking a look at is the Old Mutual Asia Pacific Fund managed by Ian Heslop and his team using a numbers driven investment process to make investment decisions based on objective criteria. This frees up their investment strategy from the biases which often impact human reasoning. 

The manager believes that in general, there are more ‘inefficiencies’ to be exploited in the Asia Pacific region compared to the other markets in which they invest, and judging by the fund’s stellar performance alone, he’s right on the money.

Maike Currie is an investment director at Fidelity International and the author of The Search for Income – an investor’s guide to income-paying investments. The views expressed are her own. @MaikeCurrie