Emerging market funds were pummelled hard by Black Monday. But not quite all of them.
There are seven emerging markets funds with returns in the double-digits despite the great fall of China and the shockwaves that hit global markets after it.
The top performer has been NFU Mutual’s Global Emerging Markets fund, according to data from FE Trustnet. Returns of nearly 12.5 per cent over the past seven weeks make it the clear winner. But there are six more with returns over 10 per cent.
|NFU Mutual – Global Emerging Markets||12.49%|
|Marlborough – Emerging Markets||11.11%|
|MFS Meridian – Emerging Markets Equity||11.09%|
|M&G – Global Emerging Markets||10.92%|
|Baillie Gifford – Emerging Markets Growth||10.69%|
|HSBC – GIF Global Emerging Markets Equity||10.46%|
|Scottish Widows HIFML – Emerging Markets Focus||10.08%|
Emerging markets were already getting hammered by a continuing commodities rout, and markets dependent on the Chinese economy suffered doubly after Black Monday, PatrickEnright, analyst at FE Research, said:Many emerging markets have been hit particularly hard by Black Monday, when Chinese stocks fell through the floor on 24 August, setting off a wave of sell-offs across equities markets.
China had until recently been unrelenting in its appetite for commodities, so when this demand softened, countries like Brazil were hit hard.
Chinese imports are down by nearly 20 per cent compared to last year, but this isn’t the only headwind for emerging markets, also struck by a strong dollar, weighing heavily on debt burdens:
Commodity reliant economies have also seen a huge depreciation of their currencies, with the Brazilian real depreciating over 40 per cent against the dollar in 2015.