REGIONAL/SINGLE COUNTRY
EMERGING MARKET EQUITY
SECTOR ANALYSIS
Three-year sector performance
Most regional emerging market funds
delivered negative returns over the threeyear period, with those in the emerging
Asia segment performing better than that
of emerging Europe and Latin America.
The performance by single country funds
varied and featured at both ends of the
performance
spectrum.
India-focused
funds did particularly well, while Brazilfocused funds were at the bottom dropping
50% in US dollar terms over the period.
MARKET REVIEW
Sector performance diverged across
regions and countries. Latin America and
emerging Europe equities were hit hardest
due to the falling oil and commodity prices.
These regional currencies also suffered
from strong depreciation pressures in the
face of a deteriorating macro outlook and
a strengthening US dollar. Specific events
including the Russian/Ukraine conflict
and the corruption scandal in Brazil also
weighed on the two biggest economies. In
contrast, emerging Asia fared much better,
with several countries, including India,
posting solid returns on the back of Modi
coming into power.
Source: FE Analytics (31 Mar ’13 to 31 Mar ’16)
MARKET OUTLOOK
Emerging market equities are now trading
at a considerable discount versus developed
market equities. However, a combination
of falling demand for materials and an
increase in oil and gas supply will do little
to relieve the uncertainties surrounding the
commodity-oriented economies. The only
exception to this may be the emerging Asia
economies, which should be better off as
they tend to benefit from lower commodity
prices and some positive changes taking
place in China.
Three-year annualised return/volatility
Provided by FE Advisory Asia as of 31 May ’16
Source: FE Analytics (31 Mar ’13 to 31 Mar ’16)
For professional investors only
Fund Selector Asia Fund Insights Directory 2016
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