Baring Emerging Europe Plc

Emerging Markets

New for 2019. Looks for ‘Garp’ in emerging Europe

Baring Emerging Europe was highly commended in the Best Emerging Markets Trust category of Money Observer’s investment trust awards for the second year running in 2018. Its three-year performance vastly outstrips most other emerging markets trusts as well as benchmark indices. For this reason, and its solid 4.9% yield, it has taken a well-earned place in our Rated Funds.

Matthias Siller has run the trust since 2008 with Adnan El-Araby and Maria Szczesna being named as managers in 2018.

They remain convinced about the merits of investing in emerging Europe, which offers growth prospects at a reasonable price. The managers invest in small and medium-sized companies and follow what is known as a ‘Garp’ strategy – buying growth stocks at the right price, rather than simply buying cheap stocks, so the fund will tend to underperform in momentum markets, when stock fundamentals are less important.

Russia accounted for more than 60% of portfolio at the end of 2018, followed by Poland at 18.5% and Turkey at 10%. Russia was one of the strong- est-performing markets of 2018, delivering returns of around 20%, while Turkey was one of the worst, losing more than 30%. At an index level, Polish stocks also lost money, but less so. Political and currency risk underline the need for careful stock picking.

The managers own Russia’s Sberbank and dominant social network Mail.ru, and have been taking advantage of the depressed valuations in Turkey by picking up companies with strong balance sheets such as mobile telecoms market leader Turkcell.

Narrative and ratings content all as of January 2019.

See all Money Observer rated funds
Name
Baring Emerging Europe Plc
Manager
Baring Asset Management Inc.
Type
Closed Ended Investment Company
ISIN
GB0032273343
Sector
European Emerging Markets
Launched
18/12/2002
OCF
1.5 %
Risk Rating
5
3 Year Sharpe
1.09
3 Year Alpha
7.96
Yield
4 %
Benchmark
MSCI EM Europe 10/40 NR EUR
Fund Size
£ 96.56 million
NAV
856
Gearing
106
Discount Premium
-11
The investment objective is to achieve long-term capital growth, principally through investment in securities listed on or traded on an Emerging European securities market or in securities of companies listed or traded elsewhere, whose revenues and/or profits are, or are expected to be, derived from activities in Emerging Europe.
Holding %
PJSC Lukoil ADR 11.16 %
NOVATEK PJSC GDR 8.59 %
Sberbank of Russia PJSC 8.29 %
Gazprom PJSC ADR 7.03 %
Powszechny Zaklad Ubezpieczen SA 4.55 %
Turkcell Iletisim Hizmetleri AS 4.44 %
X5 Retail Group NV GDR 4.31 %
PKO Bank Polski SA 3.97 %
KGHM Polska Miedz SA 3.77 %
Mail.ru Group Ltd GDR 3.23 %
Region %
Europe - Emerging 87.90 %
Sector %
Financial Services 32.69 %
Energy 29.83 %
Consumer Defensive 8.51 %
Technology 7.14 %
Basic materials 6.87 %
Communication Services 5.40 %
Name
Baring Asset Management Inc.
Address
02110, Boston, United States
UCITS
No
Legal Structure
Closed Ended Investment Company

Managers

Adnan El-Araby
Joined 10/01/2018
Maria Szczesna
Joined 10/01/2018
Matthias Siller
Joined 12/01/2008

Data provided by Morningstar.

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