BNY Mellon says offshore funds have historically been off the IFA radar due to being unavailable on mainstream platforms, not listed in IMA sectors and having different charges and investment levels compared with UK domiciled funds. The UK retail share classes are designed to provide a level playing field.
The Brazil equity fund combines bottom-up analysis with a top-down overview. It was launched in 2007 and comprises a long only portfolio of stocks that have a strong cash flow, sustainable earnings and are trading at an attractive valuation. It is managed by Brazil-based BNY Mellon subsidiary BNY Mellon ARX.
The Vietnam, India and China fund was launched in 2008 and is managed by Hong-Kong based Asian investment specialist Hamon, a firm in which BNY Mellon has a minority stake. The fund invests in undervalued stocks in Vietnam, India and China at a time when all three markets are benefiting from rising domestic demand. Most of the portfolio is invested in India and China, but there are no formal rules about geographical weightings. The fund has performed well since launch and has an AA rating from S&P.
The Global emerging markets equity value Fund is managed by US based The Boston Company Asset Management, which takes a bottom-up value investment style. This may be useful in an environment where stockpicking in emerging markets has become more important, as returns are no longer generated simply by being invested in emerging markets. The other two funds are emerging markets debt local currency and global property securities funds.
The three regional equity funds may be useful for IFAs who are looking to allocate specific exposure to particular emerging markets without going down the Bric route, or a specific value investment style through a global emerging markets fund.
A narrow regional focus may increase risk relative to global emerging market funds that diversify across regions, while a value approach could miss out on good opportunities that growth investing could identify. However, BNY Mellon’s appointment of experienced local managers and a value specialist for the global emerging markets equity value fund may carry some weight with advisers.