It’s tough picking stocks in Sao Paulo or Mumbai – particularly if you spend all your time in a London office. This is what sets the Aberdeen Emerging Markets Fund apart. It boasts a network of offices around the world, overseen by its head of equities Hugh Young in Singapore. That, says its marketing literature at least, should give Aberdeen a unique insight into what’s happening in any given market. And sure enough it has returned 104.4% over the past five years against 68.7% for the sector.
This year, in common with all emerging markets, its performance has lagged – down 28.9%. That may sound abysmal. But emerging markets now trade on a very low forward p/e of 3.6, making this ideal hunting ground for Young. As a ‘special-situations’ manager, he looks for companies with bombed-out valuations and “little or no debt that could be held in the portfolio for the long term”, says Mark Dampier of Hargreaves Lansdown in Money Marketing. So for those keen to get into emerging markets, this may not be a bad time to start drip-feeding money into the fund, which holds Femsa, Latin America’s largest beverage group, and South African wholesaler Massmart among its top holdings.
Wary of the Russian market, the fund has almost equal weightings in Brazil and India, his preferred markets. The fund also has a very low exposure to the rapidly slowing Chinese economy. “Indian companies are light years ahead of Chinese companies. They understand what shareholders want, whereas in China they owe their loyalty to whichever bit of the government owns them,” Young tells Citywire.
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Aberdeen Emerging Markets Fund top holdings
| Name of holding | % of assets |
| Aberdeen Global India Opportunities | 4.30 |
| Samsung Electronics (Pref) | 4.10 |
| China Mobile | 8.10 |
| Taiwan Semiconductor Manufacturing | 3.10 |
| Petroleo Brasileiro (Pref) ADR | 3.00 |
| Massmart | 3.00 |
| Richter Gedeon | 2.90 |
| Vale | 2.80 |
| Femsa | 2.60 |
| PetroChina Co | 2.50 |