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Emerging Markets Manager of the Year
First State Investments
The emerging market debt team at First State Investments doubled the assets under management in its emerging market debt to $2 billion after both new clients and existing ones poured new money into its funds. The Emerging Markets Bond fund outperformed its benchmark by 5.7% over five years and by 0.3% over three years, and lagged its benchmark by less than 1% over one year. The team has integrated environmental, social and corporate governance factors in its fixed income investment, particularly into its sovereign bonds, and it was awarded the highest possible score from the UN Principles for Responsible Investment for fixed income in the SSA category that comprises sovereign, supranational and sub-national agency. In 2015, the firm divided its business and its high-profile Asian emerging market equity offering now falls under Stewart Investors.
Hermes Investment Management
Every one of Hermes Investment Management’s three emerging market strategies has outperformed its benchmark over one, three and five years net of fees to the end of June 2016. The emerging markets team has also seen its assets under management increase from £1.2 billion at the end of 2015 to £1.9 billion at the end of June. Hermes’ owner, the BT Pension Scheme, which has invested in emerging markets for more than two decades, decided to put more money into these strategies in the first quarter of 2016 after consistent outperformance. The Hermes Global Emerging Markets strategy has also attracted new money from third-party clients, which now account for more than 60% of the assets managed in the Ucits fund. The emerging markets team is supported by Hermes EOS, which has £169.8 billion under advice and votes on behalf of, and under the supervision of, the asset management team.
LGM, a specialist emerging markets equity investment boutique within BMO Global Asset Management, has delivered impressive relative performance in tough markets; its entire range of global emerging market funds has outperformed the MSCI Emerging Market Index over one, three and five years. Its flagship BMO LGM Global Emerging Markets Strategy outperformed its MSCI Global Emerging Market Index benchmark by 16.2% net of fees over one year to the end of May 2016, by 3.8% over three years and by 4% over five years. The assets under management in its global emerging markets strategy increased to nearly $2 billion at the end of June, from about $1.7 billion a year earlier. In the year ending June 30, its assets under management have grown by 75%. Its footprint in Europe is growing, too. The Dublin-domiciled version of the strategy nearly doubled its assets under management to $236 million. The team working on the fund pursues a high-conviction strategy of investing in between 40 and 60 companies that offer genuine diversification away from developed markets.
Newton Investment Management
Newton, a £51.8 billion London-based subsidiary of The Bank of New York Mellon Corporation and part of BNY Mellon, manages two emerging market strategies. The £66 million Newton Global Emerging Markets Fund outperformed the MSCI Emerging Markets Index by 5.4% net of fees over five years to the end of June 2016, by 5.4% in the three years and 8.3% over one year. The £136 million Newton Emerging Income Fund, which was launched in 2012, lagged the index by 3% net of fees in the three years to the end of June but outperformed it by 6.1% over the past year. Newton has a responsible-investment team, which is integrated in its research team and whose input plays an important role in its decision-making process. Its team focuses on new economy companies, where it believes corporate profits and the index will be shifting towards.
RBC Global Asset Management
RBC Global Asset Management manages more than $2.2 billion across three emerging market strategies, the RBC Emerging Markets Equity Fund, the RBC Emerging Markets Value Equity Fund and the RBC Emerging Markets Small Cap Equity Fund – the latter two having been launched in 2013. The $2.2 billion RBC Emerging Markets Equity Fund, which accounts for nearly all the emerging market assets, outperformed its benchmark, the MSCI Emerging Markets Total Return, by 4.6% net of fees over the five years ending June 2016. This outperformance was even greater more recently, when it outperformed its benchmark by 5% over three years and by 5.9% over one year. Over the past year, its assets under management across the three funds have increased by $430 million amid difficult market conditions that led the index losing 12%. The increases in assets were mainly driven by positive alpha across the three strategies but also by new allocation from large North American and European clients after it received positive ratings from consultants.