Wise's Ropers to remain 'flexible' and 'nimble' as Growth fund ups emerging markets exposure
'Constructive macro view' behind latest additions
The TB Wise Multi-Asset Growth fund took advantage of depressed valuations to top up its emerging market (EM) exposure in late 2019, according to co-manager Vincent Ropers.
Two offerings that had been added into the fund's portfolio were Mark Mobius's £98.8m Mobius investment trust and Mark Asquith's newly launched £5.5m MI Somerset Emerging Markets Discovery fund.
Ropers said the firm had a "constructive macro view" that would be supportive for the region moving forward.
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"Few people realise how much easing EM central banks have done over the past year," he said.
"They have been very aggressive across the board [and], contrary to developed market central banks, they still have ammunition to ease further if need be.
"If you take China as an example, evenif [GDP] growth is slowing down from 7%to 6%, if you compare that with 0.6%growth in Germany, you still have this massive differential.
"Then when we look at relative performance and valuations, emerging markets have lagged developed markets and we think that the valuations are not aligned with the growth prospects that still exist in those markets."
Ropers said there were therefore "many opportunities out there to take advantage of", with the firm's Growth fund upping its EM exposure to 15%, "with a bias towards Asia".
The opportunity in emerging market risk
The two funds bought into last year give Ropers' team "idiosyncratic exposure", due to their mid- and small-cap bias. They will "behave very differently from the broader indices", he explained.
Added benefits of the Mobius trust, meanwhile, include its concentrated nature, with just 21 holdings, and its strategy of active engagement with management.
Ropers said the fund's exposure to global and European managers gives it added exposure to EM, either directly or indirectly.
Its largest holding, AVI Global Trust, for instance, has a 20% weighting to Asia and 9% in other EM countries.
Exposure to EM consumer growth through brands such as LVMH, Unilever and Heineken, "is what can make European equities so attractive", he explained.
Ropers said the team remains constructive on risk assets, with a bias to value funds such as AVI, TR European Growth, JOHCM UK Equity Income and Polar Capital UK Value Opportunities.
Meanwhile, he added: "We need to remain extremely flexible, extremely nimble, keep focused on valuations, taking our profits as and when things start getting too expensive and recycling those positions into cheaper ones and be prepared to jump on opportunities."
In the year to 11 February, the TB Wise Multi-Asset Growth fund returned 9.1%, below its CBOE UK All Companies benchmark's 10.4% return, according to FE fundinfo.
Over a three-year period, it has outperformed its benchmark, returning 25.1% compared to 17.9%.
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