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Shining a light on leading performers in emerging markets

Citywire Discovery is our unique system for analysing the performance of individual fund managers. Saleem Shivji, analyst in our Investment Research team, has been digging through this exclusive data and here he reveals what it tells us about performance in a key sector.

The trend of emerging market outflows seen in 2013 began to reverse by the second quarter of 2014. Money has been flowing back into developing markets, especially into emerging Asian countries and Latin America.

China opened up its mainland A-Share market to offshore investors in November 2014 throug the Hong Kong-Shanghai Stock Exchange Connect.

This financial reform led to a stock market rally of over 130% over the past year in CHF terms despite the slowdown in China’s GDP growth rate.

Sector profile: emerging markets

Funds: 188

Fund managers: 211

Asset management groups: 102

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The chart above, taken from Discovery, shows managers’ long-term versus short-term risk-adjusted performance compared with their peers.

Their positions are an aggregation of the performance of all the emerging market equity funds a manager has run versus their respective benchmarks.

At the top of the graph, the leader over 10 years, is Aberdeen’s Devan Kaloo.

He also runs the most money in the sector with 8% of the assets (indicated by bubble size), although his market share has decreased by a third over the past year. Kaloo’s recent performance has lagged, placing him in the bottom quartile over three years (towards the left-hand side of the chart).

Skagen’s Kristoffer Stensrud comes in second over 10 years. The Norwegian started working on the Kon-Tiki fund when it was launched in 2002 and thus has more experience than his co-managers. However, the fund and Stensrud’s performance have also lagged over three years.

Patrice Lemonnier has been running funds at Amundi for 12 years. His lengthy experience has translated into excellent long-term performance although, like Kaloo and Stensrud, this has also drifted recently.

Vontobel’s Rajiv Jain, who has the second biggest share of assets in the sector after Kaloo, has beaten his benchmarks on average over the long term.

His performance over three years also places him firmly within the top 10 of those managers with at least 10 years’ experience.

The managers with the best combination of long- and short-term performance are William Blair’s Jeff Urbina and Todd McClone. The US duo are on the verge of their 10-year anniversary co-managing emerging market funds.

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Todd McClone & Jeff Urbina

William Blair

This emerging market duo run the William Blair Emerging Markets Leaders and Emerging Markets Growth funds. They are overweight the tech sector and are finding compelling stocks in both China and India. Both funds have 40% in large companies, but McClone and Urbina also have experience with developing country small caps.

1 Total return figures are an average of a manager’s Swiss-registered-for-sale funds, calculated to end March 2015 in Swiss francs.

2 Annualised standard deviation reported in percentage points.

3 Market share includes all funds which are registered for sale in Switzerland.

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Rajiv Jain

Vontobel

Rajiv Jain has been running the Vontobel Fund Emerging Markets Equity fund since 1997. He skews his investments towards India, which makes up nearly 30% of the portfolio. He’s also considerably overweight consumer staples. In addition to his exemplary long-term performance, Jain has one of the lowest levels of volatility in the sector.

1 Total return figures are an average of a manager’s Swiss-registered-for-sale funds, calculated to end March 2015 in Swiss francs.

2 Annualised standard deviation reported in percentage points.

3 Market share includes all funds which are registered for sale in Switzerland.

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Devan Kaloo

Aberdeen/Danske

Emerging market heavyweight Devan Kaloo manages the Aberdeen Emerging Markets Equity fund as well as two mandates for Danske: Global Emerging Markets and Global Emerging Markets Small Cap. Kaloo still runs the most assets of all managers in the sector, although has lost nearly half of his market share over the past two years. Lack of exposure to China has taken its toll on recent performance.

1 Total return figures are an average of a manager’s Swiss-registered-for-sale funds, calculated to end March 2015 in Swiss francs.

2 Annualised standard deviation reported in percentage points.

3 Market share includes all funds which are registered for sale in Switzerland.

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Related Fund Managers

Devan Kaloo
Devan Kaloo
117/174 in Equity - Global Emerging Markets (Performance over 3 years) Average Total Return: 6.78%
Kristoffer Stensrud
Kristoffer Stensrud
159/174 in Equity - Global Emerging Markets (Performance over 3 years) Average Total Return: 1.66%
Patrice Lemonnier
Patrice Lemonnier
93/174 in Equity - Global Emerging Markets (Performance over 3 years) Average Total Return: 10.55%
Jeff Urbina
Jeff Urbina
71/174 in Equity - Global Emerging Markets (Performance over 3 years) Average Total Return: 13.74%
Todd McClone
Todd McClone
70/174 in Equity - Global Emerging Markets (Performance over 3 years) Average Total Return: 13.74%
Rajiv Jain
Rajiv Jain
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