The fund will gain exposure to the smaller emerging economies through a series of unfunded swaps with a number of different major investment banks.
This process, the firm says, will enable them to remove both subjectivity and manager risk from the investment process and avoid the potential liquidity issues inherent in smaller company stocks.
The only MSCI economies the fund will not invest in are Colombia and Morocco; the former is deemed too expensive and the latter too small.
Domiciled in Dublin, the Sarasin IE Emerging Markets – Systematic Fund will adopt the same investment strategy as the firm’s EmergingStar – Global Fund, launched 16 years ago.
The fund will be available through three share classes: Retail A which has a 1.50% annual management fee and Platform P with a 0.65% annual management fee; both have minimum investments of $1000. The Institutional I share class has a 0.65% annual management fee and minimum investment $1million.
Biggest not always best
Paul Cooper, partner and product specialist at Sarasin & Partners, said: “It is becoming increasingly accepted that the largest countries in the emerging world do not necessarily offer the greatest investment returns and therefore to invest the bulk of one’s assets there is not an appropriate approach.
"We believe our fund will appeal as a single holding to many investors looking to have a greater proportion of their portfolios committed to those smaller emerging economies offering the most exciting areas of economic growth. The Fund will also complement investors’ existing emerging market holdings through style diversification.”
It was announced yesterday that London-based Sarasin and Partners had been appointed as managers of a range of funds of funds for private clients on behalf of Stirling House.
