The rising star funds of 2013

We ask the experts to share their favourite funds for investors looking for a little more risk.

Land of the rising sun?: several experts believe it may soon be Japan's time to shine.

By Rosie Murray-West7:00AM GMT 26 Feb 2013
http://www.telegraph.co.uk/finance/personalfinance/investing/

Feel like taking a little more risk? We asked financial professionals to share their suggested funds of 2013.

Investors should remember that past performance is no indicator of future gains and that the value of investments – in particular share holdings – can go down as well as up.

Shaun Port

Chief Investment Office for online investment manager Nutmeg.com

Fund Pick HSBC MSCI Indonesia ETF

Why We think Indonesia is an interesting pick for 2013. Private sector credit accounts for just 30pc of GDP in Indonesia – a fraction compared to other south-east Asian economies – but loans are growing at 22pc per year. The economy is growing at a steady 6-7pc per year and with growth in the rest of Asia starting to rebound, prospects for Indonesia encouraging.

The stock market has significantly lagged behind other countries in the region, notably Thailand and the Philippines, and we believe Indonesia will start to catch up in 2013.

Investing through the HSBC MSCI Indonesia ETF gives access to the largest companies listed on the Indonesian stock market, with low ongoing fees of just 0.6pc per annum.

Mark Dampier

Hargreaves Lansdown

Fund Pick: JPM Natural Resources

Why: If you are going for an outsider you need to look at what has had a hard time over the previous year or so. That firmly puts you in the oil, gold, resource area. JPM Natural Resources covers all three. The fund is down 36.4pc since the end of 2010, so you are clearly not buying at the top. The oil price is at about a nine-month high, gold too, and "off the top" has also done well, but the companies involved in mining and extracting have tanked. So there seems to be a good chance we'll see a re-rating at some point, if prices of the physical commodities stay at such levels.

Philippa Gee

Philippa Gee Wealth Management

Fund Pick: AXA Framlington Japan Smaller Companies

Why: If you were looking for a fund to represent a small part of your overall Isa portfolio and were comfortable with very high risk, I'd suggest AXA Framlington Japan Smaller Companies. Some believe Japan will always be a basket case, others that Japan's time to flourish is near. I tend to sit more with the sceptics, but if it does move forward, the smaller-cap side of the market will benefit the most over time.

The fund is managed by Chisako Hardie and what has impressed me is that, even in difficult economic conditions, she has delivered consistency and managed to limit the downside of markets. Ms Hardie has a good pedigree, having managed money at SWIP and Martin Currie before leading this fund from its launch in 2006. It's a small fund, at £22m, which keeps it nimble.

Alan Steel

Alan Steel Asset Management

Fund Pick: Jupiter European Emerging Opportunities

Why: Having twice read Ruchir Sharma's book on Breakout Nations – he's head of Global Macro at Morgan Stanley in NY – I'd have a go at Jupiter European Emerging Opportunities.

It is less than £300m in size and has underperformed Europe over three years, with positions in Russia and Turkey, and other holdings in Poland, Croatia etc. Russia has seriously underperformed, but if oil analysts at Ned Davis Research are right, oil will rise strongly as the world moves back to growth, and Turkey and Poland are tipped to be breakout nations. With Isas being free of Capital Gains Tax, this could deliver big returns – if not imminently, pretty soon.

Jason Hollands

BestInvest

Fund Pick: GLG Japan Core Alpha Equity D H GBP

Why: The wildcard market this year could be that perennial disappointer, Japan. Since its bull run of the Eighties came to an abrupt end, Japan has been decisively out of favour. It suffered from poor demographics, political gridlock (which has stalled much-needed reform), a deteriorating relationship with its ever more assertive neighbour (but key trading partner) China and the impact of natural disasters. The strength of the yen has also made it internationally uncompetitive.

One of the few benefits of the strong yen, however, has been to prompt international mergers and acquisitions (M&A) by Japanese corporates. In 2004, Japanese companies typically earned around 30pc of their operating revenues outside the country – now, that figure is more like 50pc. This makes them less exposed to some of the domestic challenges facing the country.

Of course, markets can stay cheap for a long time, unless there is a catalyst for a re-rating – but a radical change of policy involving an aggressive devaluation of the yen and other stimulus measures (following the recent elections), could propel the market materially higher. But as a sterling-based investor we think it makes sense to hedge our currency risk, so stock returns are not offset by currency depreciation.

GLG Japan Core Alpha Equity D H GBP is the FX-hedged version of GLG's Japan retail fund. Managed by Stephen Harker, the fund has an excellent long-term record versus the market but has underperformed over the past two years as it has a strong style bias to undervalued large companies which has been out-of-favour. This could be an interesting way to play a potential re-rating story: buy cheap shares in a cheap market.

Andy Parsons

The Share Centre

Fund Pick: Standard Life UK Equity Income Unconstrained

Why: Investors seeking additional income mainly still choose the historic stalwarts of the UK Equity Income sector, which have a significant weighting towards traditional core UK blue-chip income-producing stocks. However, this fund offers real portfolio diversification within that area.

Since Thomas Moore began managing the fund in January 2009, the portfolio has benefited from his fresh and thorough review. The fund is top quartile over both three- and one-year returns and is ranked second in its sector for the year to date.

The portfolio is made 

up of large and mid-cap companies, with just over 50pc in the mid-cap arena. Although there are some familiar top holdings, the portfolio does not merely follow the herd – the 

current top 10 holdings include Cineworld Group, Hiscox, Easyjet and Stagecoach Group.

With a yield of around 3.04pc, we feel the fund can provide real overall portfolio diversification for investors actively seeking additional income from the UK arena.

James Bateman

Fidelity Worldwide

Fund Pick(s) Allianz US Equity/Thames River Global Bond Fund

Why: The Allianz US Equity fund has had a difficult time over the past couple of years, as the manager's long-term focus on finding mispriced growth opportunities in the US market has not found favour with investors focused on stability and certainty of outcomes. But the longer-term track record is strong and Seung Min runs a very disciplined process – focused on finding solid franchises that have been overlooked or misunderstood by the market. As the recovery in the US market broadens out and solid franchises are more widely rewarded, the stored up value in this portfolio should start to come through for investors.

The Thames River Global Bond Fund suffered in 2012 when the majority of global bond funds posted positive returns. It follows a truly value-investing philosophy, looking for sustainable real yields in the global bond universe. The managers' views tend to play out in the long term, making this a fund suitable for patient investors.

Tim Cockerill

Rowan Dartington

Fund Pick: Invesco Perpetual Emerging European

Why: Emerging Europe has been off the radar for some time with investors, and this is not surprising given all the problems in core Europe. Emerging Europe and core Europe are, of course, closely linked and the debt crisis has had a knock-on effect. But now the ECB has essentially written a bailout plan for Spain, Italy or any other country in difficulty, confidence is returning.

At the centre of emerging Europe is Russia, the largest position in the Invesco Perpetual fund (69pc). It isn't without its challenges and the politics can be unpredictable, but it is a resource-rich country. Personal tax is just 13pc, which is good for consumers, and President Putin recently announced a $400bn investment in infrastructure.

The GDP forecast for 2013 is 3.6pc – less than China but much better than the UK and Europe as a whole – and the market is yielding 4pc on a price to earnings (P/E) ratio of 6:1, so it's cheap.

The other main area of investment for the fund is Poland, where 2013's GDP is expected to be around 1.5-2pc. The market is yielding 4.4pc and the P/E ratio is 10:1 – trumping the UK, France and Germany on growth, and cheaper too.

This fund is an asset allocation play on a recovery in Europe and the world, and the knock-on benefits to emerging Europe. Managed by Liesbeth Rubinstein, the fund has one of the best records for funds investing 

in this region.

Ms Rubinstein seeks out companies that have strong balance sheets, good cash flow and operate in parts of the economy that are more robust and able to weather difficult conditions. At £36m, it's quite a small fund, but for investors wanting something unusual that is well placed for an improving global economy it's worth a look.

Darius McDermott

Chelsea Financial

Fund Pick: M&G Global Emerging Markets.

Why: The manager invests in any emerging market region and avoids stocks affected by political risk. He's a value investor and, contrary to what may people may think, value styles rather than growth tend to outperform in emerging markets. He has a consistent track record and does well in both rising and falling markets. Between 50 and 70 stocks are selected through strict bottom-up analysis, reflecting the manager's core beliefs that value creation, not economic growth, will deliver returns over the long term. He has 17 years experience at M&G and is backed by a well resourced team.

Most equity markets are still decent value, even after the new year rally. We may see a slight pull back in 

the short term, but equities are expected to do well this year. With valuations so reasonable, now is a good time to get in for longer-term investors.

By Rosie Murray-West7:00AM GMT 26 Feb 2013

http://www.telegraph.co.uk/finance/personalfinance/investing/

Ashmore Assets Rise 9.1% in Fiscal Third Quarter on Investments

By Anne-Sylvaine Chassany - Apr 12, 2012 2:51 PM GMT+0800

Article from Bloomberg

Ashmore Group Plc (ASHM), a U.K. fund manager that invests in emerging markets, said assets under management increased 9.1 percent in the fiscal third quarter to $65.9 billion as markets advanced.

Net inflows from clients in the period added $1.2 billion to funds under management for the period ending March 31 and $4.3 billion came from investment performance, the London-based company said in a statement today. The firm said it is performing “in line” with management’s expectations.

“Consistent with Ashmore’s long standing investment approach of adding risk during periods of market volatility such as that experienced in our first half, all investment themes have subsequently delivered positive investment performance in what has been a strong third quarter,” Ashmore said in the statement.

Ashmore, which has almost half of its assets invested in emerging-market debt, has risen 16 percent in London trading this year. The firm’s flagship Emerging Markets Liquid Investment Portfolio (ASHEMLI) fund, with $3.9 billion of assets, is up 6.8 percent this year, according to data compiled by Bloomberg.

To contact the reporter on this story: Anne-Sylvaine Chassany in London at achassany@bloomberg.net;

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net;

Article from Bloomberg

U.S. Economy Expected to Grow 2.9 Percent over Next Year, According to BNY Mellon Mellon Capital Report Also Sees Japan, Australia Escaping Recession

April 10, 2012, 8:10 a.m. EDT

Article from Market Watch

NEW YORK, April 10, 2012 /PRNewswire via COMTEX/ -- The U.S., Japan and Australia are expected to escape recession over the next 12 months, with the U.S. economy now expected to expand by 2.9 percent over the period, according to the Spring Outlook report from Mellon Capital Management Corporation, part of BNY Mellon Asset Management.

Excluding the U.S., Japan and Australia, most developed countries are expected to experience a mild recession over the next year, with European countries at the highest risk, the report said.

"The U.S. economy is continuing to strengthen and we now put the probability of anemic U.S. growth at less than five percent," said Lex Huberts, president of Mellon Capital. "This is a significant improvement from September, when the probability was closer to 20 percent that the U.S. economy would grow at less than two percent over the next year."

Mellon Capital generates its own proprietary measure of leading economic indicators (LEI), with an LEI level of slightly less than 100 indicating, in Mellon Capital's view, a significant probability of a mild economic contraction. All major developed countries except the U.S., Japan and Australia currently have readings below 100. Southern peripheral countries in Europe have the lowest LEI, but France, Great Britain and Germany also appear weak, all below 99, signaling the likelihood of at least a mild recession, according to the report.

"Looking at our forward estimates of economic fundamentals, we are cautiously optimistic on stocks given the signs of economic recovery in the U.S., positive steps toward resolving the euro area debt crisis and the general stabilization of earnings forecasts in Europe," said Huberts. "However, tensions with Iran are a concern."

The report also notes that Mellon Capital is moderately positive on commodities, favors emerging markets equities and favors the Australian dollar and Canadian dollar among developed market currencies at this time.

Gabriela Parcella, chief executive officer of Mellon Capital, said, "We are seeing growing interest in our global asset allocation and alternatives strategies as institutions increasingly recognize the opportunities for investing in the current economic environment."

Notes to Editors:

Founded in 1983 by innovators in the investment management field, Mellon Capital Management Corporation applies a disciplined and analytical approach to global investment management strategies. As of December 31, 2011, the firm had $219.7 billion in assets under management, including assets managed by dual officers of Mellon Capital Management Corporation, The Bank of New York Mellon and The Dreyfus Corporation, and $8.5 billion in overlay strategies. Additional information about Mellon Capital is available at www.mcm.com . It is part of BNY Mellon Asset Management, one of the world's largest asset managers.

BNY Mellon Asset Management is one of the world's leading asset management organizations, encompassing BNY Mellon's affiliated investment management firms and global distribution companies. Information about BNY Mellon Asset Management can be found at www.bnymellonam.com .

BNY Mellon is a global financial services company focused on helping clients manage and service their financial assets, operating in 36 countries and serving more than 100 markets. BNY Mellon is a leading provider of financial services for institutions, corporations and high-net-worth individuals, offering superior investment management and investment services through a worldwide client-focused team. It has $25.8 trillion in assets under custody and administration and $1.26 trillion in assets under management, services $11.8 trillion in outstanding debt and processes global payments averaging $1.5 trillion per day. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation BK -1.03%  . Additional information is available on www.bnymellon.com or follow us on Twitter@BNYMellon.

All information source BNY Mellon Asset Management as of December 31, 2011. This press release is qualified for issuance in the US only and is for information purposes only. It does not constitute an offer or solicitation of securities or investment services or an endorsement thereof in any jurisdiction or in any circumstance in which such offer or solicitation is unlawful or not authorized. This press release is issued by BNY Mellon Asset Management to members of the financial press and media and the information contained herein should not be construed as investment advice. Past performance is not a guide to future performance.

A BNY Mellon Company(SM)

SOURCE BNY Mellon

Article from Market Watch