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Emerging Markets Managed Fund?

Discussion in 'Managed Funds & Index Funds' started by Ems, 18th Nov, 2009.

  1. Ems

    Ems Member

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    15th Mar, 2007
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    Location:
    QLD
    I am looking for a fund that invests in emerging markets. I went to a Peter Spann seminar on Saturday and he has a fund called Emergent which invests in emerging markets. The fees are between 2.68% and 4%. Are these fees the average as I thought they were rather high?

    If anyone could point me in the right direction to some funds that invests in emerging markets that would be great. As the Peter Spann product is new there are no performance stats for previous years.

    Thanks
    Ems
     
  2. Young Gun

    Young Gun Guest

    Are these fees high yes (there is also a contribution fee of 3.3% and a performance fee of 15%), are there better funds available yeah. Aberdeen Asian Opportunities fund was performing well on last look.

    I just don't know about Peter Spann... he gives me a real uneasy feeling, looking him just makes me feel all slimy..

    there is performance stats it started in July 08 at $1.00 per unit and its now about $0.89 per unit.
     
  3. Johny_come_lately

    Johny_come_lately Well-Known Member

    Joined:
    1st Jul, 2009
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    Location:
    SE Queensland
    Hi Ems

    Colonial First State do an emerging market, called Firstchoice Emerging Markets. It is available retail and wholesale, and returned 1.94% for the last year.



    Cheers, Johny.
     
  4. theinvestor

    theinvestor New Member

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    2nd Nov, 2009
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    Location:
    Sydney, NSw
    Emerging Markets

    Hi All,

    I am looking investments in China and aswell as the emerging markets.
    Has anyone tried investing into Premium China Fund? i think they are the largest China fund in Australia.

    I want to hear some feedbacks before thinking to invest.

    Thanks
     
  5. voigtstr

    voigtstr Well-Known Member

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    An exchange traded fund might do the trick for you. IEM. see attached yearly graph from e*trade.
     

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  6. voigtstr

    voigtstr Well-Known Member

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    a word of caution on that etf though, I think its based on U.S. dollars, and the fund is trading on very low volumes on the ASX.
     
  7. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Don't worry about the low volumes - that is largely irrelevant for ETFs as they are open-ended funds and more units can be issued as required ... unlike ordinary shares where the fixed overall supply can mean low liquidity.

    Firstly there is a local market maker who works to ensure the shares trade at close to the NAV of the fund and who creates the primary liquidity for regular trades of the fund. If they run out of units, they can get more from the US market (this particular fund is cross listed). If the US market runs out, they can simply issue more units!

    Here's an explanation of how liquidity works for iShares ETFs ... http://au.ishares.com/publish/content/documents/pdfs/liquidity.pdf

    More education information about ETFs: iShares Podcasts - ETF Investment Education - iShares Australia
     
  8. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    My understanding is that the NAV calculations are done in USD and the corresponding share price for the ASX listed ETF is then converted into AUD.

    However, the underlying shares are held in their local currency, so (ignoring any cross-rate issues), the AUD value of the share will merely represent the converted value of the underlying shares. If the AUD goes up against the value of the shares in the fund, the effective value will go down, and vice versa. The AUD/USD exchange rate is not as important as the AUD/xxx exchange rate for the shares held in the fund when determining the NAV and hence value of the share. There should (in theory) be not much difference to if the AU fund was to invest in the underlying foreign shares directly rather than via the US.

    However, whenever distributions are paid - there is a period of several weeks where the distributions are paid in the US (in USD) and then eventually forwarded to Australia for payment here. Any AUD/USD currency fluctuation during this period after the US distribution has been paid up until it is received in Australia and paid to the Australian investors will have an impact on the final AUD figure received.
     
  9. voigtstr

    voigtstr Well-Known Member

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    Thanks for the explanation Sim! I was worried about volume and currency risk, if these arent really an issue, I'll look for an entry signal when I have the funds clear. I think this etf would be a more cost effective method of investing in the area compared to an actual fund.
     
  10. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Don't forget that you will still have exposure to currency fluctuations for the actual shares held by the fund.

    If the AUD goes up against most of the emerging markets currencies, the value of the fund (in AUD terms) will fall.

    This is no different to any other international fund though - they all face the same issues (although some use hedging to manage the risk).