First State funds exit GEM sector for breaching guidelines

Three of First State's Global Emerging Market equity funds are to be moved out of the IMA GEM Sector for failing to meet eligibility requirements.

The IMA's rules state a fund sitting in its Global Emerging Markets sector should have at least 80% invested in stocks listed in what it defines as GEM countries. In a note to clients, First State said the three funds affected - the £3.4bn Global Emerging Markets Leaders, £750m Global Emerging Markets, and £300m Global Emerging Markets Sustainability funds run by Jonathan Asante (pictured) and team - have not met this test for several years. This is "not only because they own stocks listed outside GEM, but also because the funds hold relatively high cash balances at present, fearing t...