Aberdeen Emerging has reported results for the year ended 31 October 2016. In an otherwise good year, the fund was marginally behind its benchmark. The net asset value total return for the year was 36.4%, slightly behind the total return of 37.7% from the benchmark index, the MSCI Emerging Markets Net Total Return Index (in sterling terms). The share price total return for the year was 36.1%.
The manager points out that a significant portion of that gain was a consequence of sterling weakness in the period following the result of the UK’s referendum on continued membership of the European Union. Were the Company’s NAV performance for the year to be stated in US dollar terms then the result would have been a total return of 8.3%.
The managers go on to say that marginal underperformance of the Benchmark during a period of rapidly rising markets is consistent with the diversified portfolio held by the Company. Fund selection made a small positive contribution to relative returns, with outperformance delivered by a number of the Company’s Asian holdings countered by weaker performance from its Latin American investments. In Asia, the most notable positive contributors were the Thai focused Ton Poh Fund and Fidelity China Special Situations. The portfolio’s exposure to Korean preferred shares proved a negative as Weiss Korea Opportunity Fund lagged the Korean market. In Latin America, the Company’s holdings in Brazil struggled to keep pace with a liquidity driven rally. Asset allocation made a small negative contribution to relative performance, with underweight positions in Brazil and Taiwan detracting, as did an overweight allocation to Turkey. A number of markets contributed positively, including the Company’s underweight allocations to China and South Africa along with an overweight position in Russia. Discount movements on closed end investments were a neutral factor during the period, with a significant positive contribution from JP Morgan Global Emerging Markets Income Trust offset by a slight widening of discounts across the rest of the closed end portfolio.
AEMC : Aberdeen Emerging marginally behind benchmark