Fund of the week: a novel way to play emerging markets
If you’re looking for a novel way to play emerging market industrialisation, Fidelity may have the fund for you. Fidelity Emerging Europe, Middle East and Africa fund has been running offshore since June, returning 22.5% in the first six months after launch. But the fund, which comes to the UK market this month as an open-ended investment company, isn’t for the faint-hearted.
Run by Nick Price, an analyst of ten years standing with Fidelity, it’s now up 4% since June, against -4.3% for its benchmark MSCI Morgan Stanley Capital International Emerging EMEA index. These regions are home to 81.5% of the world’s proven oil reserves, as well as 97% of its platinum and 42% of iron ore. Price believes there are high rewards to be had from investing in their related commodity and oil stocks, which are less well-researched than their peers in the developed world.
Take the growth in diesel engine cars, which require more platinum catalysts than unleaded models. “A prime beneficiary of the demand in natural resources is African Rainbow Minerals. It is a South African mining and metals company that has operations in platinum, copper, nickel, ferrous materials, alloys, iron ore and gold,” he tells Investment Adviser.
He also believes the oil boom has a long way to go – and that it should have a lasting impact on the petrodollar economies. “What differs from previous oil booms is that, firstly, the oil-price move appears to be secular, driven by Chinese and Indian demand,” he tells the International Herald Tribune. “Secondly, more money is being recycled into Middle East economies than in the past, which should help diversify the economies.”
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Fidelity Emerging Europe, M/East, Africa top ten holdings
Name of holding, % of assets
, 8.2%
, 5.1%
, 3.9%
, 3.6%
, 3.2%
, 3.1%
, 3.1%
, 3.0%
, 2.8%
, 2.6%
| Name of holding | % of assets |
| Gazprom | 8.2% |
| Sberbank of Russia | 5.1% |
| Sasol | 3.9% |
| Vostok Nafta Investment | 3.6% |
| Anglo Platinum | 3.2% |
| JSFC Sistema Gdr Regs | 3.1% |
| Impala Platinum Holdings | 3.1% |
| Mobile Telesystems ‘ADR’ | 3.0% |
| Uralkaliy JSC | 2.8% |
| Acron | 2.6% |
