US emerging market fund managers ignore borders
Thursday, 10 July 2014
US emerging market fund managers are paying less attention to where a company is located or listed than to whether it's making money, either as an advanced world company doing business in the developing world, or the other way around. A top holding in the $710 million Ivy Emerging Markets Equity Fund, the best performing diversified emerging market fund over the last five years, is Las Vegas Sands Corp, the US-based casino operator that generates most of its revenue in Macao. The No. 2 holding in the $2.8 billion GMO Emerging Domestic Opportunities Fund is Colgate-Palmolive Co, based in New York but the maker of the best-selling toothpaste in India. And the $25 billion American Funds New World Fund is betting on a US housing recovery by investing in Hong Kong-based Techtronic Industries Co Ltd, which sells power tools through Home Depot Inc, its largest customer. ’It's a new geography,’ said Rob Lovelace, a portfolio manager for the American Funds New World Fund, part of the No. 3 US mutual fund family with $1.15 trillion in assets. ‘Investing based on where a company is domiciled doesn't really work. We have a better proxy because companies are disclosing more in their revenue breakdowns,’ according to Reuters.