Last week, we covered the impressive degree of overlap between the MSCI Asia-Pacific and emerging markets indices, and what it means for allocators selecting funds between the two regions.
A brief reminder that around three quarters of the two benchmarks are identical due to the significant presence of emerging markets in Asia, meaning DFMs must be careful when pulling together this exposure to avoid any doubling up.
With that in mind, we thought we’d take a quick glance at the most popular emerging markets funds among the wealth managers we cover.
The most popular emerging markets fund is split between two contenders: one active and one passive. Both the Vanguard Emerging Markets Stock index fund and the Artemis SmartGARP Global Emerging Markets equity fund are held by eight allocators apiece, though it is the passive that’s been gathering the most steam over the past eighteen months — with four buys since the beginning of 2024.
The Vanguard tracker follows the MSCI EM benchmark, which means its three largest regions are China, Taiwan and India in that order.
It has returned around 17 per cent year-to-date, in part down to the weaker dollar.
Fidelity International’s investment director Andrew Oxlade said this reduces debt servicing costs in emerging markets, boosts capital flows into non-dollar assets, and lifts commodity prices. He also pointed to the recent Bank of America survey that suggested fund managers expect further declines in the greenback throughout the rest of the year, potentially providing further room for EMs to run.
Those DFMs who prefer to use the Asia-Pacific region to gain access can read our like-for-like analysis on the most widely-used funds by following the adjacent link.
The most popular Asia-Pac funds among DFMs