Focus Capital, a specialist emerging markets absolute return manager, has launched a fund of funds that invests across multiple asset classes.
The Emerging World Fund invests through other funds in emerging market equities, debt, and hedge fund strategies. It also deploys cash strategies to mitigate downside risks.
John Cleary, chief executive and chief investment officer at Focus Capital, says that by adopting a product-neutral stance the fund has greater flexibility than many of its rivals and so can seek higher risk-adjusted returns. "Most investment businesses are delineated and there are huge inefficiencies," he says.
Focus Capital has investments in at least 45 emerging markets. It has about 600 underlying positions managed by more than 100 portfolio managers and analysts.
More than 80% of the fund’s performance comes from strategic asset allocation, says Cleary. "That’s the top-down call," he says, emphasizing the importance of choosing the correct countries and assets. "The rest of the performance is a result of managing risk and outsourcing funds."
The fund has produced good returns in its short life (it has been running one year although it has only just launched publicly). It achieved a gross return of 19.2%