Russell Emerging Markets Fund Class A aims to significantly outperform the Fund’s benchmark, before costs and tax, over the long term by providing exposure to a diversified portfolio of predominantly emerging market shares.
The Russell Investments Emerging Markets Fund underperformed the benchmark on a gross of fees and tax basis in the September quarter.
Contributing to the Fund’s underperformance was poor stock selection in Brazil, including overweights to department store Lojas Renner S.A. and Localiza Rent a Car S.A. Both stocks recorded sharp declines for the quarter. Stock selection in China also weighed on returns; notably underweights to Alibaba Group and social platform Kuaishou Technology. Performance was further impacted by an underweight to Turkey, which significantly outperformed the broader market over the period. In contrast, the Fund benefited from its exposure to momentum stocks. An underweight exposure and strong stock selection in Taiwan also added value, including a material underweight to Taiwan Semiconductor Manufacturing Co. Stock selection in Saudi Arabia added further value over the period; notably an overweight to information security company Elm Co., which gained almost 35% for the quarter.
During the quarter, we removed Neuberger Berman from the Fund’s underlying manager line up and replaced them with growth-oriented manager Sands Capital Management and value-oriented manager Pzena Investment Management.
Moving forward, the Fund maintains modest tilts toward value and momentum, which is in line with our preferred strategic positioning. The Fund also holds a bias toward small cap stocks. Elsewhere, the Fund is overweight China and Brazil and holds a modest exbenchmark exposure to Vietnam. We also remain underweight India, Taiwan and Saudi Arabia; countries where our managers do not find as many attractive opportunities.
What is Russell Emerging Markets Fund Class A Russell Emerging Markets Fund Class A is an Managed Funds investment product that is benchmarked against World Emerging Markets Index and sits inside the Foreign Equity - Emerging Markets Index. Think of a benchmark as a standard where investment performance can be measured. Typically, market indices like the ASX200 and market-segment stock indexes are used for this purpose. The Russell Emerging Markets Fund Class A has Assets Under Management of 105.75 M with a management fee of 0.01%, a performance fee of 0 and a buy/sell spread fee of 0.55%.
How has the investment product performed recently?
The recent investment performance of the investment product shows that the Russell Emerging Markets Fund Class A has returned 4.54% in the last month. The previous three years have returned -0.19% annualised and 13.52% each year since inception, which is when the Russell Emerging Markets Fund Class A first started.
How is risk measured in this investment product?
There are many ways that the risk of an investment product can be measured, and each measurement provides a different insight into the risk present. They can be used on their own or together to perform a risk assessment before investing, but when comparing investments, it is common to compare like for like risk measurements to determine which investment holds the most risk. Since Russell Emerging Markets Fund Class A first started, the Sharpe ratio is NA with an annualised volatility of 13.52%. The maximum drawdown of the investment product in the last 12 months is -2.27% and -45.08% since inception. The maximum drawdown is defined as the high-to-low decline of an investment during a particular time period.
What is the relative performance of the investment product?
Relative performance is what an asset achieves over a period of time compared to similar investments or its peers. Relative return is a measure of the asset's performance compared to the return to the other investment. The Russell Emerging Markets Fund Class A has a 12-month excess return when compared to the Foreign Equity - Emerging Markets Index of -0.9% and -0.19% since inception.
Does the investment product produce Alpha over its Peers?
Alpha is an investing term used to measure an investment's outperformance relative to a market benchmark or peer investment. Alpha describes the excess return generated when compared to peer investment. Russell Emerging Markets Fund Class A has produced Alpha over the Foreign Equity - Emerging Markets Index of NA% in the last 12 months and NA% since inception.
What are similar investment products?
For a full list of investment products in the Foreign Equity - Emerging Markets Index category, you can click here for the Peer Investment Report.
What level of diversification will Russell Emerging Markets Fund Class A provide?
Russell Emerging Markets Fund Class A has a correlation coefficient of 0.96 and a beta of 1.13 when compared to the Foreign Equity - Emerging Markets Index. Correlation measures how similarly two investments move in relation to one another. This establishes a 'correlation coefficient', which has a value between -1.0 and +1.0. A 100% correlation between two investments means that the correlation coefficient is +1. Beta in investments measures how much the price moves relative to the broader market over a period of time. If the investment moves more than the broader market, it has a beta above 1.0. If it moves less than the broader market, then the beta is less than 1.0. Investments with a high beta tend to carry more risk but have the potential to deliver higher returns.
How do I compare the investment product with its peers?
For a full quantitative report on Russell Emerging Markets Fund Class A and its peer investments, you can click here for the Peer Investment Report.
How do I compare the Russell Emerging Markets Fund Class A with the World Emerging Markets Index?
For a full quantitative report on Russell Emerging Markets Fund Class A compared to the World Emerging Markets Index, you can click here.
Can I sort and compare the Russell Emerging Markets Fund Class A to do my own analysis?
To sort and compare the Russell Emerging Markets Fund Class A financial metrics, please refer to the table above.
Has the Russell Emerging Markets Fund Class A been independently verified by SMSF Mate?
This investment product is in the process of being independently verified by SMSF Mate. Once we have verified the investment product, you will be able to find more information here.
How can I invest in Russell Emerging Markets Fund Class A?
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Comments from SMSF Mates
SMSF Mate does not receive commissions or kickbacks from the Russell Emerging Markets Fund Class A. All data and commentary for this fund is provided free of charge for our readers general information.
Performance Commentary - August 31, 2023 Stock selection in Taiwan contributed positively to performance over the period, including overweights to Accton Technology Corp. and ASUSTeK Computer, Inc. Both stocks posted strong gains for the month. The Fund also benefited from stock selection in South Korea; notably underweights to poor-performing names like battery manufacturer EcoPro and chemicals company POSCO Future M. Stock selection in China added further, albeit modest, value over the period. This included underweights to electric car maker NIO, Inc., e-commerce platform JD.com and fellow shopping platform Meituan. In contrast, stock selection in Hong Kong detracted from overall performance in August; notably exbenchmark holdings in maritime transport company Pacific Basin Shipping Ltd. and hotel and casino operator Galaxy Entertainment Group. Our underweight exposures to Turkey and India also weighed on returns; the latter including an underweight to information technology consulting firm Infosys. Performance was further impacted by stock selection within the materials space; notably an overweight to South African gold miner AngloGold Ashanti.
Moving forward, the Fund retains an overweight to China. Elsewhere, the Fund is overweight Brazil and Vietnam and underweight India, Taiwan and Saudi Arabia; countries where our managers do not find as many attractive opportunities. The Fund also maintains modest tilts toward value and momentum stocks, which is in line with our preferred strategic positioning, as well as biases toward small caps and growth names.
Performance Commentary - July 31, 2023 Contributing to the Fund’s underperformance was poor stock selection in China; notably underweights to consumer-related names like Meituan, Alibaba Group and car maker NIO. Stock selection in South Korea also weighed on returns. This included overweights to Kia Corp. and Samsung Electronics; both of which significantly underperformed the broader market in July. Performance was further impacted by stock selection in Brazil, including an underweight to iron ore major Vale S.A. In contrast, the Fund benefited from our long-held underweights to Saudi Arabia, India and Taiwan. Stock selection in Hong Kong also added value in July. This included overweights to Galaxy Entertainment Group, Orient Overseas International and Geely Automobile. Stock selection in Mexico added further value; notably an overweight to bank Grupo Financiero Banorte, S.A.B. de C.V., which climbed more than 15% for the month. In terms of strategic factor positioning, our preference for small cap, value and momentum stocks contributed positively to performance over the period.
Moving forward, the Fund retains an overweight to China. Elsewhere, the Fund is overweight Brazil and Vietnam and underweight India, Taiwan and Saudi Arabia; countries where our managers do not find as many attractive opportunities. The Fund also maintains modest tilts toward value and momentum stocks, which is in line with our preferred strategic positioning, as well as biases toward small caps and growth names.
Performance Commentary - June 30, 2023 The Russell Investments Emerging Markets Fund underperformed the benchmark on a gross of fees and tax basis in the June quarter.
Contributing to the Fund’s underperformance was an overweight exposure and poor stock selection in China, including overweights to China Tourism Group Duty Free Corp. and LONGi Green Energy Technology Co. An underweight to India also weighed on returns; notably underweights to Housing Development Finance, Bajaj Finance and telco Bharti Airtel. Performance was further impacted by an underweight to Taiwan, including an underweight to Taiwan Semiconductor Manufacturing Co. Other notable positions to impact returns were overweights to South African miner AngloGold Ashanti and Hong Kong’s Galaxy Entertainment Group. In contrast, the Fund benefited from an overweight exposure and strong stock selection in Brazil, including an overweight to Petróleo Brasileiro S.A. and an underweight to iron ore major Vale S.A. Stock selection in South Korea also added value; notably an overweight to chip maker SK hynix. In terms of strategic factor positioning, our preferences for value and momentum stocks added further value over the period.
Moving forward, the Fund maintains modest tilts toward value and momentum, which is in line with our preferred strategic positioning. The Fund also holds a bias toward small cap stocks. Elsewhere, the Fund is overweight China and Brazil and holds a modest exbenchmark exposure to Vietnam. We also remain underweight India, Taiwan and Saudi Arabia; countries where our managers do not find as many attractive opportunities.
Performance Commentary - May 31, 2023 Contributing to the Fund’s underperformance was an underweight exposure and poor stock selection in India. This included underweights to Infosys and Hindustan Unilever; both of which recorded strong gains for the month. An overweight to the poor-performing Hong Kong market also weighed on returns; notably an ex-benchmark holding in hotel and casino operator Galaxy Entertainment Group. Performance was further impacted by poor stock selection in China, including overweights to Zijin Mining Group Co. and Aluminum Corporation of China. In contrast, the Fund benefited from an overweight exposure and positive stock selection in Brazil; notably an underweight to iron ore major Vale S.A., which fell in line with lower iron ore prices. Stock selection in South Africa also added value in May, including underweights to publishing company Naspers and global gold miner AngloGold Ashanti. Both stocks posted sharp declines for the month. In terms of strategic factor positioning, our preference for small caps and growth names contributed positively to performance over the period; though this was partly offset by our value bias.
Moving forward, the Fund retains an overweight to China. Elsewhere, the Fund is overweight Brazil and Mexico and underweight Saudi Arabia, India and Taiwan; countries where our managers do not find as many attractive opportunities. The Fund also maintains modest tilts toward value and momentum stocks, which is in line with our preferred strategic positioning, as well as biases toward small caps and growth names.
Performance Commentary - April 30, 2023 Contributing to the Fund’s underperformance was an overweight exposure and poor stock selection in China, including overweights to interactive media company Baidu and industrials stocks Weichai Power Co. and Shenzhen Inovance Technology Co.
All three stocks posted sharp declines for the month. Stock selection in Taiwan also weighed on returns in April; notably our holdings in semiconductor names Taiwan Semiconductor Manufacturing Co. and MediaTek. Performance was further impacted by underweights to India and Saudi Arabia; both of which recorded good gains over the period. In contrast, the Fund benefited from an overweight exposure and positive stock selection in Brazil; notably an underweight to iron ore major Vale S.A., which fell in line with lower iron ore prices. Stock selection amongst South African miners also added value in April, including an overweight to global gold mining company AngloGold Ashanti.
In terms of strategic factor positioning, our preference for value stocks and small caps contributed positively to performance over the period; though this was offset by poor stock selection amongst both factors. Moving forward, the Fund retains an overweight to China. Elsewhere, the Fund is overweight Brazil and Mexico and underweight Saudi Arabia, India and Taiwan; countries where our managers do not find as many attractive opportunities.
The Fund also maintains modest tilts toward value and momentum, which is in line with our preferred strategic positioning, and a bias toward small caps.
Performance Commentary - March 31, 2023 The Russell Investments Emerging Markets Fund outperformed the benchmark on a gross of fees and tax basis in the March quarter. Contributing to the Fund’s outperformance was an underweight exposure and strong stock selection in India. This included nil holdings in Adani Total Gas and Adani Enterprises. Stock selection in Taiwan also added value over the period; notably our holdings in strong-performing technology names like United Microelectronics Corp. and Taiwan Semiconductor Manufacturing Co. Partly offsetting these positions was our broader underweight to the country.
Other notable positions to add value were overweights to South Korean car maker Kia Corp. and Argentine e-commerce platform MercadoLibre. In contrast, an overweight exposure and poor stock selection in Brazil detracted from overall performance. This included overweights to electric utility Eletrobras S.A. and healthcare provider Hapvida Participacoes e Investimentos S.A. Stock selection in China also weighed on returns; notably underweights to communication services names like Tencent Holdings and Baidu.
During the quarter, we exited our risk positioning strategy targeting large Chinese ecommerce platforms due to some of our managers moving into this space. Moving forward, the Fund maintains modest tilts toward value and momentum, which is in line with our preferred strategic positioning. The Fund also holds a bias toward small cap stocks.
Elsewhere, the Fund is overweight China, Brazil and Mexico and underweight India, Taiwan and Saudi Arabia; countries where our managers do not find as many attractive opportunities.
Performance Commentary - February 28, 2023 Contributing to the Fund’s underperformance was an overweight exposure and poor stock selection in Brazil. This included overweights to electric utility Centrais Elétricas Brasileiras S.A. and securities and commodities exchange operator B3 S.A.; both of which posted steep declines for the month. An ex-benchmark exposure to Vietnam and an underweight to Taiwan also weighed on returns; the latter including a material underweight to Taiwan Semiconductor Manufacturing Co. In terms of strategic factor positioning, our preference for value detracted from returns while our momentum tilt and small cap bias had no material impact on overall performance. In contrast, the Fund benefited from positive stock selection in India, including underweights to poorperforming names like Adani Enterprises and Adani Total Gas. Stock selection in China also added value; notably underweights to large cap growth names like Meituan and Tencent Holdings. [Note: We recently removed value manager AllianceBernstein from the Fund’s manager line up and temporarily replaced them with a Russell Investments systematic positioning strategy that targets large cap value.] Moving forward, the Fund retains an overweight to China. Elsewhere, the Fund remains overweight Brazil and underweight Saudi Arabia, India and Taiwan; countries where our managers do not find as many attractive opportunities. The Fund also maintains modest tilts toward value and momentum, which is in line with our preferred strategic positioning, and a bias toward small caps.
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