Lloyd George Management has launched a global emerging markets fund to be run by Jacob Rees-Mogg, wh...
Lloyd George Management has launched a global emerging markets fund to be run by Jacob Rees-Mogg, who currently manages the LG Antenna fund.
The LG Emerging Markets Fund will use a bottom-up process based on research of company fundamentals and management visits. Lloyd George has offices in Hong Kong and Singapore and employs local analysts to research stocks.
Companies are screened to see whether there will be a strong return on balance sheets. P/E must be reasonable and growth must be at a good price and must show value. Current weightings for the portfolio include an underweight position in Taiwan. This is because Taiwan has been severely punished for its high dependence on the technology sector. The economy's over-reliance on exports for sustainable growth in domestic demand highlights Taiwan's vulnerability to a global recession.
Thailand and Malaysia both have overweight positions because of the domestic consumption stories. In Malaysia on the economic front, consumer credit growth has been steady, although some softening is expected as global uncertainty grips local consumers. Car lending and mortgages have each been growing at about 20% year on year. In Thailand for 2003 private sector domestic demand should remain strong, supported by lower interest rates and increased access of consumers to loans.
In Eastern Europe overweight positions are found in Hungary and Russia. The portfolio in Hungary has been focused on banks and the telecommunications industry. These industries do not have the same debt problems as western companies. This country will benefit from the enlargement of the EU. Lloyd George also sees growth potential in Turkey following the election of the new PM Abdullah Gul.
The fund will be attached to Lloyd George's UK Oeic but will be made available to European investors as well as those in the UK. The minimum investment is £1,000. The initial fee is 3.5% and the annual management charge is 1.5%.
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