EM managers rejecting benchmark weightings

Emerging markets managers are deviating from benchmark weightings, arguing they miss out areas of greatest potential economic growth and investment opportunities.

Their warning comes as EM equities fund inflows last week hit a 10-week high. The sector absorbed about $7bn this year. Fiona Manning, investment manager on Aberdeen Asset Management’s emerging markets team, says: “The benchmarks are neither great guidance in terms of the quality of companies nor the weight you should hold. “Petrobras for example is 18% of the Brazil index. Holding benchmark weight is quite significant company risk.” Most Aberdeen clients limit Manning’s team to 10% in single stocks. Fancisco Alzuru, manager of Natixis Asset Management’s $71m Hansberger Emerging La...