Emerging Markets Equity Income - June Commentary

This is a marketing communication. Please refer to the prospectus, supplement and KID/KIID for the Funds before making any final investment decisions. The value of this investment can fall as well as rise as a result of market and currency fluctuations. You may not get back the amount you invested.  

Past performance does not predict future returns. 

Emerging markets rebounded during May. The MSCI Emerging Markets Net Total Return Index rose 3.3% (all performance figures in GBP unless stated otherwise). The fund generated strong outperformance, rising 6.7%. For the year to date, the fund is outperforming, up 4.5% versus the benchmark up 1.0%. Further performance data is shown below.

Emerging markets underperformed developed markets in the month, as the MSCI World gained 5.0%. The US was an outperformer, with the S&P 500 Index up 5.4%. All emerging markets regions recorded a positive performance. Asia was the best performing region, rising 4.1%. Latin America was next, up 0.7%. EMEA (Europe, Middle East and Africa) was the weakest region, up 0.5%. Growth was the outperformer during the month, up 3.6% versus value, up 3.2%.

Among the largest countries, the best performers were Taiwan (+11.6%), Indonesia (+8.6%) and Korea (+6.9%). The worst performing countries were Saudi Arabia (–5.6%), Thailand (–4.2%) and Brazil (–0.8%). The strongest performing stocks in the portfolio were Elite Material (+43.4%) and China Medical System (+26.7%). The weakest performers were Tata Consultancy Services (–1.7%), Kweichow Moutai (–1.5%) and Suofeiya Home (–0.6%).

In our outlook, we consider the constantly evolving US-China trade relations, and how the fruits of China's sustained investments in strategically valuable sectors, such as advanced technology manufacturing, are increasingly being recognised by western counterparts.

However, rather than reacting to the constantly shifting economic landscape, our focus is on the profitability and management ability of a business. The requirement that companies have strong balance sheets generally makes them less dependent on capital markets, and by looking at companies’ performance over a long-time horizon (at least eight years), we gain increased confidence that the business is likely to continue to perform well when handling challenging circumstances in the future.

Past performance does not predict future returns

Fund launch: 23/12/2016.

Source: FE fundinfo. Net of fees. Investors should note that fees and expenses are charged to the capital of the Fund. This reduces the return on your investment by an amount equivalent to the Ongoing Charges Figure (OCF). The OCF for the calendar year 2024 for the share class used for the fund performance returns was 0.89%. Returns for share classes with a different OCF will vary accordingly. Transaction costs also apply and are incurred when a fund buys or sells holdings. The performance returns do not reflect any initial charge; any such charge will also reduce the return.

The value of this investment can fall as well as rise as a result of market and currency fluctuations. You may not get back the amount you invested.
 

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