How often do you get an anniversary gift from your mutual fund company?
MISSISSAUGA. ON, Nov. 15 /CNW/ - 16.43% was the one-year performance of the Excel BRIC Fund as of November 2, 2010, the first anniversary of its launch, and Bhim Asdhir, the President and CEO of Excel Funds Management Inc. is more convinced than ever that actively managed funds in the best of the world's emerging markets are the key to salvation for Canadian investors who are understandably dissatisfied with indices that hover around the same point they did five years ago.
In fact, Asdhir is so bullish he gave his investors an anniversary present - the new Excel Emerging Markets Fund. This newest fund combines the enormous potential of several of Excel's established emerging market funds (which benefit from on-the-ground investment managers who uncover the best of a country's growing, but non-indexed companies) with additional direct investments in growth countries such as South Korea, South Africa, Indonesia, Vietnam and Thailand plus the further upside available from currency appreciation (investments are made in the local currencies).
Asdhir says "Our BRIC Fund has surpassed investors' expectations since we launched it last November." In its first year, the Excel BRIC Fund outperformed its benchmark, the MSCI BRIC index, by more than 5.8 percentage points, net of fees (16.43% vs. 10.6%). BRIC stands for Brazil, Russia, India and China.
Asdhir continues, "While the Excel BRIC Fund may only be a year old, its underlying funds have been a success for longer than most other Emerging Markets funds have been on the market. The Excel India Fund, our first, dates to 1998, the Excel China Fund to 2000, the Excel Emerging Europe Fund to 2007 and the Excel Latin America Fund to 2008."
The foundation for these underlying funds are the investment sub-advisers that Excel employs - advisers that are only available to individual Canadian investors through Excel Funds.
Asdhir says that "There is a strong link between active management and better-than-class performance. We use sub-advisers such as Birla SunLife, one of the largest private sector mutual fund companies in India; Baring International Investment, which has 35 years' experience in the Pacific market and is responsible for one of the largest and best performing China funds in the world; Itaú-Unibanco, which has an asset management history of more than half a century and is the southern hemisphere's largest bank, Barings International again, one of the largest fund investors in Eastern European Markets since 1980; and our own subsidiary, Excel Investment Counsel, which has developed unique and proprietary quantitative models to narrow a potential investment universe of over 8,000 companies to a short-list, based on growth and momentum factors that pay off for our investors."
Excel Investment Counsel's Senior Portfolio Manager Paul Mesburis is the lead portfolio manager of the Excel Emerging Markets Fund. Mesburis says "We employ an active money management process to uncover the best growth opportunities and, using our quantitative model, we determine optimal country asset allocation. We then work with our sub-advisers to identify the "blue-chips" of the future, current mid-cap companies just outside the index that have the greatest growth prospects."
Julie Makepeace, Excel's Vice President, Marketing and Sales, believes that one of the keys to Excel's success and growth has been listening carefully to investment advisors and developing and launching the kinds of funds that they and their clients are asking for. "The Excel Emerging Markets Fund was the next logical step," she says. "Many retail investors still find Emerging Market investing a new idea and based on what Investment Advisors have told us, we think it is an ideal entry point for investors who desperately want growth in their portfolios and are looking for a Canadian vehicle, from a proven company, that gives them exposure to the world's rapidly developing economies."
Bhim Asdhir says there is one question that pops up regularly from IAs and individual investors he meets. "Many investors have asked me why a fund instead of an emerging market ETF," says Asdhir. "Our active management approach through best-in-class sub-advisers is one of the main reasons. Our ability to identify these 'under the radar' growth companies is key. The real growth in emerging markets is in the profits driven by the consumption of the rapidly growing middle class - and these companies are primarily outside the index. Another reason is the fact that Excel generally purchases equities in local currencies and we expect a meaningful contribution to our investment return will come from emerging market currency appreciation. And, of course, there are trading commissions on ETFs; on the purchase and again on the redemption of an ETF. Our returns, including the outstanding ones for the Excel BRIC Fund over the past year, and the ones we expect from the Excel Emerging Markets Fund, are net of all fees."
Asdhir sums up his proposition this way. "Over the past decade, emerging market equities have clearly outperformed developed markets equities. But we don't want clients to invest with us because of the past, rather because of the future, that the next 10 years are going to be better than the last 10 in emerging markets.
That bodes well for Excel Funds since, to October 31, 2010, the past 10 years have returned 11.37% on the Excel India Fund.
"The Economist predicts that about 70% of the world's growth over the next few years will come from emerging markets. Goldman Sachs and others estimate that emerging equity capitalization could grow more than 470 per cent from the current US $14 trillion to US $80 trillion by 2030 and comprise 55 per cent of world market cap, up from less than one-third today.
"At Excel Funds, we specialize in emerging markets - in fact, we only offer emerging market funds. We go where the growth is and we want our investors to come with us and reap the rewards."
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. The indicated rates of return are the historical annual compounded total returns including changes in the unit value and reinvestment of all distributions and does not take into account, sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.
For further information:
Bhim Asdhir, President, 416-716-1242, [email protected]
Julie Makepeace, Vice President, Marketing & Sales, 647-309-3532, [email protected]
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