Rated emerging market equity funds: Top four for income

Rated emerging market equity funds: Top four for income

No serious private investor can afford to ignore the Asia Pacific region and the emerging markets nowadays. The economic growth rates of these countries are far superior to those of the developed countries.

Click each chart on the right-hand side for an expanded version.

To find out more about the methodology, read: How Money Observer's Rated Funds were chosen.

Aberdeen Latin American Income Investment Trust

This investment trust is an Editor's Choice. Money Observer likes the fact that income investors can gain exposure to this part of the world through this trust, and Aberdeen has a proven reputation in emerging market investing. The senior investment manager is Fiona Manning.

In order to provide a higher yield, the trust is invested in a mixture of equities and bonds. At least 25% is held in each asset class. Currently the ratio of equities to bonds is around 60:40. Otherwise the investment policy is unconstrained.

JP Morgan Global Emerging Markets Income Investment Trust

This trust is one of Money Observer's tips for 2013. It is a relatively new trust which has performed well since its launch in July 2010. It is managed by Richard Titherington.

Money Observer likes it because it provides investors with the opportunity to gain an income as well as growth from the emerging markets. Dividends are paid quarterly.

It is well diversified across countries, sectors and companies. In order to achieve a balance of income and growth it combines higher and lower yielding stocks.

Newton Asian Income

Winner: Larger fund, Asia Pacific

This fund has won the Money Observer best Asia Pacific Fund award for three years running. It is managed by Jason Pidcock. Money Observer believes it provides excellent diversification for income investors and can also be attractive for more cautious growth investors.

Pidcock maintains a strict yield discipline. Shares must yield as much as the FTSE All World Asia Pacific ex Japan index and are sold if it falls to 15% below.

Schroder Oriental Income Investment Trust

This trust was highly commended in Money Observer's 2012 investment trust awards. The manager, once again, is Schroder's Asia guru Matthew Dobbs. Money Observer likes the trust because it targets income as well as capital growth from this part of the world.

The search for income has encouraged Dobbs to seek out companies with secure growth prospects, strong balance sheets and shareholder-focused managements with the potential to grow dividends. So the trust is likely to appeal to growth investors who prefer a defensive approach as well as income seekers. Australian and New Zealand quoted companies account for around a quarter of the portfolio; other markets Dobbs likes are Hong Kong, Singapore and Taiwan.

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Fund Data
Name1 Year (%)3 Years (%)5 Years (%)Rating
Aberdeen LatAmr Inc Ltd-14.30-23.18-N/A star(s)
JPM GblEM Inc Tst plc2.5225.80-3 star(s)
Newton Asian Income6.6030.2472.465 star(s)
Schroder Oriental Inc13.9446.2587.665 star(s)

The annual Money Observer Fund Awards recognise the actively managed funds that have delivered consistently good, low-volatility returns for investors. Who were the 2013 winners, and can they continue to prosper?

Searching for funds for your ISA? Investments from the UK equity, emerging market, property, commodities and many other sectors are regularly updated in the Money Observer Rated Funds.