Wealth managers eye passives for EM exposure as funds soft close

As the most popular emerging market equity funds are soft closing to stem inflows, wealth managers are being forced to look for alternatives beyond their usual top picks.

Aberdeen Asset Management was the latest group to introduce a 2% fee on its multi-billion emerging markets equity range and competitor First State has already soft closed a number of funds in the space. Adrian Lowcock, senior investment manager at Hargreaves Lansdown, is concerned there are few options left, as not many active emerging market equity managers have outperformed the benchmark in the medium term. He said: “Over five years, out of 28 funds only four beat the MSCI Emerging Markets index (excluding Aberdeen and First State), so there is not a great deal of choice.” Mona S...