Aberdeen Life Emerging Markets Equity Fund
Objective
To provide exposure to an actively managed portfolio of direct or indirect investments in emerging stock markets worldwide, or companies with significant activities in emerging markets
Manager's Quarterly Report
July 2010
Market review
- Emerging markets fell in the second quarter. Concerns that Europe’s worsening debt problem
and policy tightening in China might stifle global recovery dominated sentiment. In particular,
Hungary’s hasty comments that it might face a Greek-like debt crisis weighed heavily on markets.
Although economic data improved, doubts over the strength of the recovery remained as
manufacturing output posted smaller gains towards the period-end. Inflation quickened,
prompting a number of central banks to raise interest rates, including India and Brazil. In
contrast, still-challenging conditions led others to cut rates further.
Fund review
- During the quarter, we increased our exposure to Poland’s Bank Pekao, while paring Israeli holdings
Teva Pharmaceutical and Check Point Software following their good relative performance.
Investors are becoming increasingly worried that in the West, deteriorating leading indicators
suggest a double-dip. Within emerging economies, there are worries about overheating.
Emerging markets will not escape a renewed weakness in global trade. However, we are focused
on their long-term attributes, namely, their robust finances and fast-growing middle class,
rather than the short-term pressures.