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• Narrow exposure to individual emerging market countries means investors can either be big winners or big losers
Allianz Global Investors is urging investors to invest their money across all four BRIC economies rather than betting on a single country emerging markets fund.
Allianz Global Investors, which manages the UK’s leading BRIC fund1, is urging investors to review their exposure to the key emerging markets of Brazil, Russia, India and China, after analysis has shown that investing in a balanced portfolio of these four markets has delivered a lower level of volatility than investing in any of these markets individually.
Fund manager of the Allianz RCM BRIC Stars fund Michael Konstantinov says:
“Individually the BRIC markets are relatively uncorrelated and global factors which have a positive impact on one particular market can have the opposite effect on another. For example, we have seen this year that high commodity prices are benefiting the key supplier economies, Russia and Brazil, but are acting as a negative factor for the commodity importers, most notably India and China. This is being reflected in divergent stock market performance at the moment. We believe investing across all four BRIC countries provides investors with the optimal way to access the opportunities as the world shifts from a US led to an emerging market led economy.”
Nick Smith, Head of Fund Distribution added:
“Over the past few months we have seen a number of high profile launches of single country emerging market funds. When you look at the excellent returns from some emerging countries over the last few years it is hardly surprising that we are seeing more of these funds crop up. This does, however, make it more difficult for investors to know which country or fund they should invest in.”
Smith continued:
“We are urging investors to consider their investment choices carefully and not get swayed into taking a big bet on one country. Collectively Brazil, Russia, India and China have delivered excellent returns, but over the years the leadership in terms of these returns has changed between the markets. This makes it even more difficult for investors to dip in and out at the right time to capture these rapid changes. It is vital therefore that investors fully understand the risks associated with the narrow exposure of a single country emerging market fund.”
• Allianz RCM BRIC Stars Fund – Investment remit
The Fund’s aim is to achieve long-term capital growth by investing predominantly in the equity markets of Brazil, Russia, India and China. Up to one third of the Fund’s assets may be invested outside the BRIC countries including developed countries and/or other emerging markets. This Fund is designed for long term investors who are willing to take a significantly higher degree of risk.
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Notes to Editors:
1 – Source: Allianz Global Investors/ Lipper. The Allianz RCM BRIC Stars Fund is 1st quartile and ranked 2nd out of 27 funds, one year to 20.06.08, bid to bid, after basic rate tax.
This press release is intended for journalists in their professional capacity and is not intended to be a financial promotion. The markets in which the Allianz RCM BRIC Stars Fund invests may be highly volatile and carry a higher risk both in terms of market and currency volatility, which may result in dramatic fluctuations from time-to-time. Past performance is not a reliable indicator of future performance. The value of an investment and the income from it can fall as well as rise as a result of market and currency fluctuations and you may not get back the amount originally invested. As the Allianz RCM BRIC Stars Fund aims for relatively high performance, it can incur greater risks than those adopting a more standard investment approach. The information contained herein including any expression of opinion is for information purposes only and is given on the understanding that it is not a recommendation and anyone who acts on it, or changes their opinion thereon, does so entirely at their own risk. The opinions expressed are based on information which we believe to be accurate and reliable, however, these opinions may change without notice.
This document has been issued in the UK by Allianz Global Investors (UK) Ltd. Allianz Global Investors (UK) Ltd is authorised and regulated by the Financial Services Authority (“FSA”). FSA Registration: 122218. Registered office: 155 Bishopsgate, London, EC2M 3AD telephone +44 (0) 20 7065 1407. The FSA’s address is 25 The North Colonnade, Canary Wharf, London, E14 5HS. Registered in England No. 1963362.
07/07/2008
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