Should a fund be large or small? Defenders of large funds argue that their size and reach allow them to exploit investment opportunities that are unobtainable for the average retail investor. Critics of the industry counter that many funds are too big, waste clients' money and have a follow the herd' mentality. Enter McInroy & Wood, a small East Lothian-based investment manager. Its emerging markets fund, managed by Francis Seymour, has consistently outperformed many larger rivals.
Indeed, the fund has proved "that you don't need the apparatus of a multi-national to achieve attractive returns", says Mark Robinson in the Investors Chronicle. And "the fact that the fund managers within McInroy & Wood have a direct stake in how the overall business is run provides a degree of independence that is lacking in larger outfits". Over the last three years the fund has returned 71%, compared to the IMA Global Emerging Markets index's return of 37%.
Seymour, a former solicitor, puts an equal emphasis on income and capital growth. Asia dominates the portfolio (53% of holdings), followed by Latin America (27%). He also invests in UK firms that have exposure to emerging markets. One example is SABMiller, the brewer with a large African footprint. Holdings are split between resources, industrials and consumer goods. The biggest is Universal Robina Corporation (PSE: URC), one of the largest branded food companies in the Philippines. Seymour expects it to benefit from rapid regional growth and a shift towards branded food. The minimum investment is £10,000 and the annual fee is 1.5%.
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McInroy & Wood EMfund's top ten holdings
|Universal Robina (Philippines)
|Localiza Rent a Car (Brazil)
|Chroma Ate (Taiwan)
|MTN (South Africa)
|Jernimo Martins (Portugal)
|LG H'hold & Health Care (South Korea)
|Kalbe Farma (Indonesia)
|Amil Participaes (Brazil)
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