Ideas For The Best Emerging Market Funds

By Cathy Mercer

The term emerging markets has a broad meaning as it covers all markets from big ones such as China and Brazil to the newest investment frontiers found in Africa. Investors are attracted by younger economies as well as greater growth, something that these markets have been consistently delivering over the past decade or so. Many investors feel that these markets funds are a vital part of their portfolio. One merit associated with them is the strong growth economies they provide are the most ideal long term bets that can be found in any place. Below are best emerging market funds ideas.

Fidelity New Markets Income, shortened to simply FNMIX, specializes in high appreciation of capital together with current income. The company usually invests a minimum of 80% of their assets securities of issuers in an emerging market. In addition, it deals with investments tied economically to upcoming markets, while at the same time making potential investments in equity securities for issuers of upcoming markets. The firm allocates its investments on a basis of the countrys markets size in relation to the size of the total market consisting of all the nations considered upcoming markets.

Another of the best funds is EMGAX. Its main objective for making investments is to give capital growth to shareholders for long terms. The company invests in at least eighty percent of the assets at its disposal in issuers equity security located within upcoming markets. Examples of nations thought as upcoming markets are Malaysia, India, South Africa, Mexico, Taiwan and China. There are probably others apart from these.

EMGAX may invest in six or more countries, although it can also invest all its assets within a single country. The fund can invest in securities in all market capitalizations, and usually seek investments offering potential growth opportunities. All in all, the opportunities must be attributable to factors such as liberalized trade policy, political change and economic deregulation.

SITEX is a fund that looks to maximize its total returns. It invests 80 percent or more of its total assets in fixed income securities for upcoming markets issuers. The fund mainly debt securities of either government related or corporate issuers that are dollar denominated in emerging market countries. Also included are entities organized in a way that they restructure all outstanding debts of the issuers.

Another top fund is Aberdeen Indonesia Fund, a non-diversification close end investment company. Its top objective is investment of capital, while the second in priority objective is the income the company looks to get by investments mainly through Indonesian debt and equity security. At least 80 percent of the total assets are invested as these securities, while all of its liquid assets are invested substantially.

The remaining assets the fund has can be invested in non-Indonesian equity and debt securities of either corporate or government entities. The firm can also make investments in short term instruments for cash management purposes. It can invest up to 20% of its total assets in equity Indonesian securities that are not listed.

All these firms are in the league of the best emerging market funds. However, an investor should bear in mind that each of them has risks associated with it, hence should exercise caution when choosing one.

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