2 / 5 Stars
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Zacks Investment Research
Standard & Poor's
2 / 5 Stars
#90 in Diversified Emerging Mkts
U.S. News evaluated 213 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 16.09 percent over the past year, -2.86 percent over the past three years, 7.18 percent over the past five years, and 11.86 percent over the past decade.
|Trailing Returns||Updated 06.30.2014|
|Year to date||3.9%|
|3 Years (Annualized)||-2.9%|
|5 Years (Annualized)||7.2%|
|10 Years (Annualized)||11.9%|
The RS Emerging Markets fund looks to capitalize on the fastest-growing companies in emerging markets.
As of July 03, 2014, the fund has assets totaling almost $432.97 million invested in 139 different holdings. Its portfolio consists mostly of foreign, large-cap growth stocks.
The fund seeks long-term capital appreciation and yields just over 1 percent. Management invests in about 100 stocks and aims to beat the MSCI Emerging Markets Index. The fund’s returns rank in the top 20 percent of diversified emerging market funds over the past three, five and ten years. The fund has returned 16.09 percent over the past year and -2.86 percent over the past three years.
Management uses a bottom-up strategy, meaning company fundamentals outweigh economic or political considerations. Management seeks companies with high cash flow and earnings growth, as well as limited amounts of debt. Qualitative factors like franchise competitiveness and industry respect are also taken into account, and valuation is a final determiner. Valuation has become less of an issue since the global financial crash in 2008, when many growth stock valuations fell more in line with their value peers. Because of this, Morningstar reclassified the fund from a large-cap blend to a large-cap growth fund in 2010, since the fund invested in more cheap growth stocks.
RS Investment Management launched the fund in 1997. New managers took over in 2008. The fund has returned 7.18 percent over the past five years and 11.86 percent over the past decade.
The fund can invest as much as 20 percent of its assets in emerging market bonds but as of July 31, 2010, it didn’t hold any. The fund aims to invest at least 80 percent of assets in emerging market securities, but often does so through investments in developed world companies with large-scale operations in emerging markets—for example, the UK's Tullow Oil.
Management practices bottom-up stock picking. It uses quantitative measures, such as high relative cash flow, low debt-to-equity ratios and earnings growth, and contrasts those with qualitative issues, such as management’s relationship with shareholders and competitive franchising.
The fund is subadvised by Baillie Gifford Overseas Limited, whose investment managers Richard Sneller and William Sutcliffe have co-managed the fund since May 2008. Both managers have more than ten years of experience with Baillie Gifford.
RS Emerging Markets Fund has an expense ratio of 1.65 percent.
The RS Emerging Markets fund has a higher standard deviation than its peers, meaning it’s more volatile. On top of that, the fund invests in volatile markets and could experience a sizable swing in a short amount of time. Its derivative securities and currency gambles also make it more sophisticated than some investors might like. At 1.61 percent, its expense ratio is above-average for its category.