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Active managers grapple with EM

New Rainmaker research shows just 30% of actively-managed emerging-market funds delivered on their promise in the last three years.

The latest Rainmaker Wholesale managed funds performance report looked at 22 products with $6.5 billion of assets over three years to August and found only a quarter (28%) outperformed their benchmarks on an after-fees basis.

The average active fees charged were 1.1% per annum. Even if active management fees were not charged, investors were still better off investing in an index fund, Rainmaker said.

Fidelity Global Emerging Markets (13.1% p.a.) was the best-performing fund, delivering 7.5 percentage points higher than the benchmark.

Capital Group New World Fund (12% p.a.) and Schroders Global Emerging Markets Fund (8.2% p.a.) were the next best performers.

At the other end of the spectrum, five funds recorded losses over three years ranging from -0.8% p.a. for the Schroders Emerging Markets Sustainable Fund, to -2.8% p.a. for the Ironbark Copper Rock Emerging Markets Opportunities Fund and the Lazard Emerging Markets Equity Fund.

Overall, the emerging markets sector's average return for the three years was 3.5% p.a. while the benchmark return was 5.6% p.a..

In other asset classes, top performers in the large-cap Aussie equities space were Lakehouse Small Companies Fund (29% p.a.), OC Micro-Cap Fund (21.8% p.a.) and SGH Emerging Companies Fund (20.4% p.a.).

Among large-cap global equities, Loftus Peak Global Disruption Fund (24.2% p.a.), BetaShares Global Sustainability Leaders ETF (23.5% p.a.) and Zurich Concentrated Global Growth (23.1% p.a.) were the winners.

Read more: RainmakerLakehouse Small Companies FundMarkets Sustainable FundSchroders GlobalCapital Group New World FundFidelity GlobalIronbark Copper RockLazardLoftus Peak GlobalMarkets Equity FundMarkets Opportunities FundOC Micro-Cap FundZurich Concentrated Global Growth
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