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Vontobel EM fund flows rebound after Jain exit

Vontobel EM fund flows rebound after Jain exit

Vontobel Asset Management’s flagship emerging market equity fund has seen a strong recovery after shedding nearly 10% of assets in the two months after Rajiv Jain quit the firm.

The Vontobel Fund – Emerging Markets Equity fund dropped from $5.03 billion at the end of March to $4.51 billion in May following Jain’s decision to quit the firm earlier this year.

Rajiv Jain left the Swiss firm to form his own investment boutique, which was unveiled in June. The announcement of his surprise exit had led Vontobel’s share price to drop around 12% in the immediate aftermath.

While investors in the flagship EM fund, which is now managed by Jain’s successor as CIO, Matthew Benkendorf, seemingly followed suit, this outpouring appears to have been arrested over June and grown in July.

The latest data from the asset manager, which covers to the end of July 2016, indicates that the fund now has $4.8 billion in assets under management. This marks the same level as assets in February, one month prior to Jain’s departure.

Speaking to Citywire Selector this summer, Benkendorf said he intended to make no major changes to the investment approach following Jain’s exit.

According to the latest available data, the major changes Benkendorf undertook over the second quarter was to reduce Indian exposure from 23.9% of holdings to 22.8% before raising it to 23% in July. This is while the UK was increased from 10.9% to 13.7% in Q2 and now sits at 13.3%.

Meanwhile, at a sector basis, Benkendorf increased consumer staples from 38.8% to 41% before reducing to 40.3%, while trimming financials from 19.4% to 17.9% and then aggressively adding in July to account for 20.9% of the fund.

The Vontobel Fund Emerging Markets Equity fund returned 3.2% in US dollar terms over the three years to the end of July 2016. This is while the MSCI EM (Emerging Markets) TR USD rose 0.2%.

On a shorter timeframe, covering the four months since Jain’s exit, the fund returned 8.4% against a market return of 5.9%.

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