Castlestone seeks fresh opportunity in Next-11

Castlestone Management is launching a Next-11 emerging markets equity fund in an attempt to find a new wave of equity investment opportunities.

Jim O’Neill, the chief economist at Goldman Sachs, coined the “Next-11” term in 2005 as a follow-up to his term Bric, or the developing world grouping of Brazil, Russia, India and China.

The term covers the next tier of 11 emerging markets: Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, South Korea, Turkey and Vietnam. (article continues below)

Arrash Zafari, who will manage the fund, says the equity markets of the Next-11 depend less overall on the production and consumption of natural resources than in the Bric nations.

Of the Next-11 countries, although Indonesia, Iran and Nigeria are major commodity producers, Mexico and South Korea are more diversified.
Zafari says the fund can adopt a zero weighting in more politically risky and less liquid regions such as Iran and will hold 70-75% in core countries such as Indonesia, Korea, Mexico, the Philippines and Turkey.

The fund will deal weekly, allowing greater flexibility to take less liquid positions, and will have a minimum market capitalisation of $200m (£130m).

It has a minimum investment of £10,000 and will open to intermediaries at the beginning of the fourth quarter of the year.