First State to merge away Asante's GEM Select on lack of large-cap opportunities

First State is planning to merge away Jonathan Asante's offshore Global Emerging Markets Select fund, saying it is "increasingly difficult" to run a concentrated large-cap EM portfolio.

The fund house has proposed merging the $161m fund into the offshore version of Asante's Global Emerging Markets Leaders fund, which currently stands at $1.2bn in size. In a letter to investors, First State said the merger has been prompted by the difficulties which the Select fund may face in future as large-cap emerging market valuations become increasingly stretched. "The investment manager is aware that the number of larger capitalisation companies which meet both the quality-based and valuation criteria required for investment by the merging fund is narrowing too far, even for a ...