Hi Damien, I found your article on the Cheapest Stock Markets historically interesting. From the list countries like Brazil and South Korea historically are cheap, but how would you invest in Brazil or specifically South Korea?
It is a great question and I really want to encourage people to put their thoughts and questions down in the Chatterbox section each month as it can help influence the research I produce and therefore give you the insights you are after.
How do you pick a fund that invests in one geographical area?
There are very few funds out there that invest in a single country but there are some. The reason for the lack of supply is the simple lack of demand. Fund houses launch new funds all the time but the type of fund they launch is determined by what they think they can market (sell) and what people seem to be buying. In a lot of ways it is like the fashion industry, apart from you can end up losing your shirt.
With every bubble there comes a glut of new fund launches trying to cash in. In the dotcom boom there was a flurry of tech funds. Then it was the turn of BRIC funds (Brazil, Russia, India and China) when BRIC became the buzz acronym.
A number of fund launches don't end up producing the interest the fund house had hoped for so they are quietly scrapped. They do this by merging the fund into one of their bigger funds. It's all a bit hush hush and fund houses use the same technique when a fund underperforms for a long period of time.
In my piece on the cheap global stock markets, along with South Korea and Brazil mentioned earlier, some of the cheapest stock markets in terms of their historic averages are:
- China
- Russia
- Poland
- Turkey
- India
In most cases there are few funds that just focus on the countries listed above. Instead the funds that do have exposure tend to invest across a range of different geographical areas. For example they may have 10% of assets in China, another 10% in India etc. These funds provide a diversified and less concentrated (and therefore less risky) way to gain exposure to country specific stock markets. It would always be my preferred way to access these markets. The trouble is that you would have to analyse thousands of funds to work out what their geographical split is and then rank them accordingly. So to save 80-20 Investor subscribers the hassle I've done it for you.
Below I've listed the funds (unit trusts only) with the greatest exposure to each of the aforementioned stock markets as a percentage of the funds's assets. Those funds highlighted in green also appear in at least one other table, or in other words they have significant exposure to more than one of the cheap stock markets listed above
How to use these tables
I've presented the tables in the same format as those throughout 80-20 Investor. Should you decide that you want exposure to South Korea, like the subscriber mentioned above, then you can see the funds with the highest allocation and how they have performed recently.
China & Japan
If you want to gain exposure to Japanese equities or China's stock market then simply go to the Best funds by sector section and look for the Chinese or Japanese sectors for fund ideas. These two sectors have an established universe of funds with Henderson China Opportunities and M&G Japan both currently appearing in the Best of the Best selection (80-20 Portfolio).
Russia
| Fund name | ISIN Code | Russia exposure | 1 month return |
3 month return |
6 month return |
Max fall in last 6 months | Ongoing charge |
| Neptune - Russia & Greater Russia | GB00B04H0T52 | 95.58 | 22.5 | 34.39 | 1.2 | -30.21 | 2.09 |
| Invesco Perpetual - Emerging European | GB00B28J0X51 | 55.97 | 15.56 | 25.15 | 4.82 | -19.07 | 1.92 |
| Jupiter - Emerging European Opportunities | GB0031862534 | 49.72 | 13.88 | 14.14 | 3.19 | -15.53 | 1.93 |
| JPM - New Europe | GB0001655124 | 45.6 | 13.73 | 13.41 | 1.07 | -16.13 | 1.68 |
| Aberdeen - Eastern European Equity | GB00B3MPT513 | 43.4 | 14.43 | 14.57 | 3.96 | -12.87 | 1.91 |
| Allianz - BRIC Stars | GB00B0WDH725 | 12.8 | 9.68 | 13.27 | 16.65 | -5.47 | 1.99 |
| Templeton - Global Emerging Markets | GB0034009190 | 11.02 | 7.3 | 6.52 | -0.56 | -9.87 | 1.95 |
| Fidelity - Emerging Europe Middle East and Africa | GB00B29TR993 | 9.9 | 9.34 | 10.33 | 14.45 | -6.15 | 1.89 |
Poland
| Fund name | ISIN Code | Poland exposure | 1 month return |
3 month return |
6 month return |
Max fall in last 6 months | Ongoing charge |
| Invesco Perpetual - Emerging European | GB00B28J0X51 | 20.02 | 15.56 | 25.15 | 4.82 | -19.07 | 1.92 |
| Jupiter - Emerging European Opportunities | GB0031862534 | 17.35 | 13.88 | 14.14 | 3.19 | -15.53 | 1.93 |
| JPM - New Europe | GB0001655124 | 16.1 | 13.73 | 13.41 | 1.07 | -16.13 | 1.68 |
| Aberdeen - Eastern European Equity | GB00B3MPT513 | 11.2 | 14.43 | 14.57 | 3.96 | -12.87 | 1.91 |
Turkey
| Fund name | ISIN Code | Turkey exposure | 1 month return |
3 month return |
6 month return |
Max fall in last 6 months | Ongoing charge |
| Aberdeen - Eastern European Equity | GB00B3MPT513 | 24 | 14.43 | 14.57 | 3.96 | -12.87 | 1.91 |
| Jupiter - Emerging European Opportunities | GB0031862534 | 21.63 | 13.88 | 14.14 | 3.19 | -15.53 | 1.93 |
| JPM - New Europe | GB0001655124 | 21 | 13.73 | 13.41 | 1.07 | -16.13 | 1.68 |
India
| Fund name | ISIN Code | India exposure | 1 month return |
3 month return |
6 month return |
Max fall in last 6 months | Ongoing charge |
| Jupiter - India | GB00B2NHJ040 | 98.3 | 4.06 | 8.48 | 26.32 | -2.13 | 1.82 |
| Neptune - India | GB00B1L6DT30 | 96.18 | 2.32 | 7.75 | 23.75 | -2.34 | 2.3 |
| First State - Indian SubcontinentB | GB00B1FXTF86 | 85.7 | 2.65 | 7.7 | 24.27 | -1.94 | 1.96 |
| Neptune - Emerging Markets | GB00B2R07G10 | 35.64 | 9.3 | 13.66 | 18.62 | -3.14 | 2.86 |
| Baillie Gifford - Pacific | GB0006063126 | 29.7 | 5.41 | 7.91 | 18.14 | -1.59 | 1.54 |
| First State - Asia Pacific Sustainability | GB00B0TY6S22 | 29.6 | 3.57 | 9.05 | 18.05 | -1.68 | 1.7 |
| Allianz - BRIC Stars | GB00B0WDH725 | 29 | 9.68 | 13.27 | 16.65 | -5.47 | 1.99 |
Brazil
| Fund name | ISIN Code | Brazil exposure | 1 month return |
3 month return |
6 month return |
Max fall in last 6 months | Ongoing charge |
| Allianz - Brazil | GB00B52L0D85 | 100 | 13.97 | 2.09 | -14.98 | -17.84 | 2.19 |
| Aberdeen - Latin American Equity | GB00B41QSW23 | 59.7 | 8.65 | 1.56 | -13.69 | -14.44 | 2.04 |
| Invesco Perpetual - Latin America | GB0033027706 | 54.24 | 9.15 | 2.45 | -13.09 | -15.52 | 1.75 |
| Neptune - Latin America | GB00B1L6F199 | 51.31 | 9.2 | 3.87 | -15.7 | -17.28 | 2.16 |
| Threadneedle - Latin American | GB0001531754 | 48.8 | 9.05 | 3.56 | -12.98 | -15.67 | 1.75 |
| First State - Latin America | GB00B64TSD33 | 29.6 | 9.46 | 6.3 | 2.7 | -5.2 | 2.02 |
| Allianz - BRIC Stars | GB00B0WDH725 | 12.7 | 9.68 | 13.27 | 16.65 | -5.47 | 1.99 |
South Korea
| Fund name | ISIN Code | Korea exposure | 1 month return |
3 month return |
6 month return |
Max fall in last 6 months | Ongoing charge |
| Baring - Korea Trust | GB0000840719 | 100 | 14.26 | 18.27 | 17.54 | -9.81 | 1.69 |
| Melchior - Asian Opportunities | GB00B06ZV610 | 24.9 | 10.65 | 13.9 | 23.5 | -1.92 | 2.55 |
| Baillie Gifford - Pacific | GB0006063126 | 23.3 | 5.41 | 7.91 | 18.14 | -1.59 | 1.54 |
Single country ETFs for the brave
I also suggest that you check out the ETF listings in the Best funds by Sector as there are country specific funds listed there. Just be wary though that a number of these are leveraged (i.e they borrow money to invest) which makes them very risky indeed.
