Funds in the most popular multi-asset sector have been selling exposure to leading emerging market and Asian portfolios as the regions continue to lag the developed world.
Data from FE Analytics shows Devan Kaloo’s £3.4bn Aberdeen Emerging Markets fund and Angus Tulloch and Alistair Thompson’s £6.7bn First State Asia Pacific Leaders funds were July’s most common disposals in the IMA Mixed Investment 40%-85% Shares sector.
Emerging markets have lost favour with investors in recent months after fears of tapering in the US and a slowdown in China have hit sentiment hard. The average fund in the IMA Global Emerging Markets sector lost 1.69 per cent in the first seven months of 2013, while IMA Asia Pacific ex Japan made a return of just 3.93 per cent. IMA Global, in contrast, is up 18.7 per cent.
Hargreaves Lansdown fund analyst Kate Marshall says: “I think a lot of investors have allocated too much to emerging market funds and quite possibly a lot of multi-managers have too. Everyone has got quite excited about emerging markets over the past decade but now things seem to be slowing down.”
In terms of buying activity in the IMA Mixed Investment 40%-85% Shares sector, the iShares S&P 500 Ucits and iShares FTSE 100 Ucits exchange traded funds were the most commonly bought in July.
Wesley Sparks’ £2bn Schroder ISF Global High Yield, Bill Mott’s £365.6m PSigma Income and the £17.8bn Standard Life Investments Global Absolute Return Strategies funds also proved popular.