3 / 5 Stars
2 3 1 4 2
Zacks Investment Research
5 (Strong Sell)
Standard & Poor's
3 / 5 Stars
#85 in Diversified Emerging Mkts
U.S. News evaluated 201 Diversified Emerging Mkts Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.
The fund has returned -9.08 percent over the past year, -5.65 percent over the past three years, 13.87 percent over the past five years, and 9.21 percent over the past decade.
|Trailing Returns||Updated 01.31.2014|
|Year to date||-6.8%|
|3 Years (Annualized)||-5.6%|
|5 Years (Annualized)||13.9%|
|10 Years (Annualized)||9.2%|
Two investment teams aren’t always better than one. Since switching to a joint management scheme in 2005, which split the portfolio evenly between growth and value approaches, the Bernstein Emerging Markets fund has posted some pretty lackluster returns. The fund focuses on firms in rapidly developing countries, mostly in Latin America and Asia, but according to Morningstar, not much differentiates this fund from its benchmark, the MSCI Emerging Markets Index.
As of February 05, 2014, the fund has assets totaling almost $1.16 billion invested in 170 different holdings. Its portfolio consists of about equal portions of medium- to mega-cap value and growth stocks abroad.
The fund lost a bit more than its average peer in 2009, partly because of its large holdings in the energy sector. It has since rebounded in 2010, with fund managers crediting picks in the tech, industrial, and energy industries for the boost. According to the fund’s annual report, the managers will invest more in the financial and consumer discretionary sectors going forward. Even with the fund’s better fortunes in 2010, analysts caution that the growth might not last in the long term. “The fund’s impressive performance as markets have rocketed ahead over the past 12 months shouldn’t turn one’s head,” Morningstar analyst Gregg Wolper says. The fund has returned -9.08 percent over the past year and -5.65 percent over the past three years.
After a particularly successful run early last decade as a value stock fund, the fund began lagging its category and benchmark after it transitioned to a split value-growth format in 2005. The fund has returned 13.87 percent over the past five years and 9.21 percent over the past decade.
After a decade of focusing on value stock investing, in 2005, the fund dedicated 50 percent of its assets to growth stocks, beginning the fund’s transition from a large-value fund to a large-blend fund. Although both teams focus on finding opportunities in emerging markets—loosely defined as nations in the process of industrialization and rapid growth—each stays true to its value or growth investing philosophy, which produces a diverse portfolio, but one that Morningstar says has unexceptional sector and country weightings. The teams’ bottom-up research style means they will consider stocks of just about any market capitalization, but they tend to stick with larger firms to mitigate risk.
Role in Portfolio
Morningstar calls this fund a “specialty” investment.
In 2005, the fund divided its assets between a value investment team and a growth investment team, changing the overall focus of the fund from value stocks to a more balanced blend of value and growth stocks. The teams consider a wide variety of company sizes, regions, and sectors but Morningstar notes that some overlap typically occurs between the two portfolios.
Bernstein Emerging Markets Fund has an expense ratio of 1.44 percent.
Emerging markets tend to be more volatile than developed markets. Additionally, the fund invests in growth stocks, which often experience more volatility than value stocks.