Rplan: Only 35 EM funds saw positive returns


Just 1.3 per cent of emerging market equity funds have delivered positive returns over the past year, according to online investment platform Rplan.co.uk.

The disparity of returns from the 2,654 funds in the sector shows a gain of 39 per cent at one end against a loss of 49 per cent at the other over the 12 months to 31 January 2016, with the vast majority in negative territory.

Just 35 funds including Oeics, investment trusts and ETFs delivered a positive return, beating the MSCI Emerging Market Index, which lost 26 per cent over the period.

Top performance came from iShares DJ China Offshore 50 ETF, with a 31.65 per cent over the year to 22 February.

The worst performer is HSBC GIF Brazil Equity fund with a loss of 42 per cent over the same period.

In spite of extreme volatility in emerging markets over the past year, underpinned by ongoing concerns over a slowdown in China, 425 emerging market funds were launched to UK retail investors in the 12 months to end of February 2016.

Rplan.co.uk chief investment officer Stuart Dyer says: “The range of performances and the number of funds available in the emerging market equities sector demonstrates just how broad the sector has now become.

“Longer term, emerging markets can deliver very attractive returns but investors should be disciplined in their exposure to this asset class and should only have a limited exposure as part of a balanced portfolio.”

Dyer adds the correction in January may be seen as an overreaction, saying China’s service sector data has been very positive.