HEAD-TO-HEAD: FSSA versus GQG Partners

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Introduction

The IMF this summer marked down its prospects for emerging market and developing economies this year, especially for emerging Asia. These revisions reflect pandemic developments and changes in policy support.

Meanwhile, China’s private corporate sector is facing regulatory headwinds that have created anxieties among investors that have affected sentiment towards emerging market equities in general. The MSCI Emerging Markets Index is down 0.37% so far this year, according to FE Fundinfo.

DWS has revised its outlook for emerging market Asia growth downward to 7.3%, noting that many Asian countries are continuing to struggle with high numbers of Covid-19 infection cases and a lag in vaccination rates. A recent resurgence in new waves of the virus, especially the Delta variant, has incentivized Asian governments to accelerate their vaccination programs. North Asia’s zero-tolerance stance toward Covid-19 has led to caps on recovery and a dampening of consumer confidence.

Nevertheless, long-term investors see opportunities. Franklin Templeton, for instance, has key exposure to countries with strong potential on technology and manufacturing, with a preference to invest more in mainland China, Taiwan, India and Vietnam, compared with Hong Kong and Singapore.

China remains attractive, according to Franklin Templeton, with long-term market growth of internet and e-commerce companies as companies upgrade services and products, while achieving government objectives of improving wealth, creating job opportunities and raising per capita income.

Against this background, FSA asked Darius McDermott, managing director, Chelsea Financial Services, to select two emerging markets equity products for comparison: the FSSA Global Emerging Markets Focus Fund and the GQG Partners Emerging Markets Equity Fund.

Against this background, FSA asked Darius McDermott, managing director, Chelsea Financial Services, to select two emerging markets equity products for comparison: the FSSA Global Emerging Markets Focus Fund and the GQG Partners Emerging Markets Equity Fund.

Source: FE Fundinfo, Morningstar. Data in US dollars. *Data since launch on 26 June 2019.

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