Some of the most successful fund managers are getting ready to launch new investment funds. Mark Mobius and Terry Smith are some of the biggest names in fund management. They have both created new funds that are open to the public. There is no shortage of nervousness in the global marketplace, but some fund managers see this as the perfect time to jump into investments that could be undervalued.
The last decade has been a good time to be in the equity markets. 2018 has been a bit more rocky, and many shares seem to have come off the boil. In addition to market-jitters, there are established markets that aren’t widely researched. Some enterprising fund managers are looking to SMEs for accelerated growth, that could mean higher than average returns for their investors.
All told, there will be room for more than £1 billion worth of new investment in funds that may be difficult to buy into later. Like anything in the world of finance, there is no guarantee of a good return, no matter who is managing your money.
Fund ONE: Mobius
Named for its founder, the legendary Mark Mobius, this fund will seek to create annual returns of between 12-15%. Mr. Mobius has brought in Carlos Hardenberg and Grzegory Konieczny from Franklin Templeton to help him select a portfolio of between 20 and 30 companies that are in emerging markets.
Mark Mobius is famous for creating the UK’s first emerging markets fund in 1989, and Carlos Hardenberg has been managing Templeton Emerging Markets since 2015. With all the problems that are emanating from places like Argentina, Brazil and Turkey, Mobius & Co might be on the right track.
This year has been rough on numerous emerging markets. Both Argentina and Turkey could enter a full-fledged currency crisis at any moment, which would likely present investors with some incredible buying opportunities.
Fund TWO: Smithson
Much like Mark Mobius, it looks like all-star manager Terry Smith is naming his new fund after himself. Terry Smith launched his own investment house in 2010. He called it ‘Fundsmith’ and over the last eight years it has returned more than 400%.
Now he has decided to bring in two fund managers from Goldman Sachs, who will manage the fund directly. Terry Smith oversee Smithson, which will seek to create market leading returns from investments in medium-sized businesses.
Will Morgan and Simon Barnard will be the two ex-Goldman managers who will be sifting through companies that are worth between £500 million and £15 billion. They will also be looking after £25 million of Terry Smith’s personal fortune, which will probably give them some extra motivation to do a great job.
Fund THREE: AVI Japan Opportunity
Asset Value Investors (AVI) isn’t going to ring the same kind of bell that a name like Mark Mobius will, but AVI already has more than £1 billion under management. Their newest fun will seek value in underfollowed Japanese companies. AVI sees this sector as being ripe for a new wave of growth, and thinks they can team up with management to unlock a company’s full potential.
Joe Bauernfreund sees Japanese SME as an attractive area that could yield substantial value for shareholders. Many smaller Japanese companies are sitting on cash that could be put to better use, or paid out to shareholders as special dividends.
Numerous Options Exist
The three new funds listed above are joining thousands of other fund that are available for investors in the UK. If you are interested in gaining access to companies that fall outside of the FTSE 100, it is a good idea to talk to an investment adviser about the best way to diversify your current holdings.
Mark Mobius is probably correct in seeing an upcoming buying opportunity in emerging markets. If Argentina falls off a cliff, and Brazil follows them, the impact on emerging markets could be severe. There would no doubt be valuable companies that were caught up in the possible selling frenzy. It is hard to imagine a better opportunity to buy into emerging market assets, especially with the run-up in asset values over the last decade.