Baring Emerging Europe Plc
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
|Sberbank of Russia PJSC||10.55 %|
|Gazprom PJSC ADR||10.02 %|
|NOVATEK PJSC GDR||9.16 %|
|PJSC Lukoil ADR||8.77 %|
|Powszechny Zaklad Ubezpieczen SA||4.93 %|
|X5 Retail Group NV GDR||4.86 %|
|KGHM Polska Miedz SA||3.81 %|
|Mail.ru Group Ltd GDR||3.03 %|
|Komercni Banka AS||2.76 %|
|Santander Bank Polska SA||2.62 %|
|Europe - Emerging||79.73 %|
|Europe - ex Euro||8.36 %|
|Financial Services||35.90 %|
|Consumer Defensive||7.42 %|
|Basic materials||6.52 %|
Data provided by Morningstar.
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