El pionero fue el difunto Templeton
En el lucero del alba, cascan un negative al fondo de Mobius, le penalizan los pilares Price, People y Performance
Templeton Developing Markets has failed to deliver.
This diversified emerging-markets fund has two of the longest-tenured managers in the category. Mark Mobius and Tom Wu have skippered this fund since its October 1991 inception. A third manager, Dennis Lim, was added to the management roster in 2001. In recent years, Wu and Lim have handled day-to-day responsibilities while Mobius has formulated top-down themes that help guide portfolio construction. A fourth manager, Allan Lam, was added in 2011.
The managers employ an investment process that is straightforward and sensible, targeting larger-cap firms that appear cheap relative to their assets or relative to projected earnings over the next five years. And they have ample leeway to diverge from the sector and country weightings of the MSCI Emerging Markets Index. Sizeable stakes in energy and consumer staples continue to set the fund apart from its typical peer, as have its larger concentrations in Brazil, Russia, and Indonesia. Following the decision to streamline the portfolio from roughly 150 to 60-80 names in 2009, it sports larger individual positions as well. As of Aug. 31, positions in Ambev AMBV3 and P.T. Astra International ASII soaked up 7.4% and 5.8% of assets, respectively.
Despite the managers' ability to invest with conviction, particularly throughout the past three-plus years, their stock-picking hasn't been strong enough to make this fund a standout in a category of 173 distinct participants. From January 2009 through Sept. 30, its 84.7% cumulative return was on par with the typical peer's and lagged the index's 93.8% gain. Looking longer term, the fund hasn't shown itself to be a stronger performer in either up or down markets of the past 10 years.
The fund hasn't delivered below-average volatility in exchange for such subdued performance, either. Its standard deviation is in line with the typical peer's over the three-, five-, and 10-year periods through Sept. 30. And while fees have come down, they are still high on an absolute basis.
Process Pillar:Neutral | Karin Anderson 10/01/2012
The fund aims to produce superior risk-adjusted returns over a full market cycle. In its quest to do so, its managers invests primarily in large-cap, emerging-markets companies or in companies that derive a significant share of revenue from developing countries. They are buy-and-hold investors who focus on firms that appear cheap relative to their assets or relative to projected earnings over the next five years. And they can make significant sector, country, and individual stock bets versus the MSCI Emerging Markets Index.
Management believes that meeting company management is crucial to identifying the long-term drivers of a business. Thus, the analyst team is spread across 17 global offices in order to stay close to the firms it covers. Analysts assess several qualitative aspects including management quality and sustainability of competitive advantages and also consider the country and economic environment before creating buy/sell targets. Valuation methods vary depending on the country and company. Each recommendation is fed into a global database and cross-checked by three regional colleagues from different offices as well as the relevant global sector analyst. Such reviews can result in the price targets being adjusted upward or downward.
This fund continues to stand out from the diversified emerging-markets crowd based on its sector and country exposure. In recent years, the portfolio has sported outsized energy and consumer staples weightings. (Both are roughly twice the typical emerging-markets fund's and the MSCI Emerging Markets Index's.) In addition to the analysts finding plenty of attractively priced firms in these sectors, this positioning is also the result of Mark Mobius' view that China's appetite for commodities and the spending power of its middle class.
That view does not lead to China stocks, however; in fact, the fund's China weighting clocks in well below the typical peer's and benchmark's. Instead, the fund's Brazil, Russia, and Indonesia stakes represent significant overweightings, partly owing to large individual positions (4%-7%) from these countries including Ambev AMBV3, Lukoil LKOD, and Astra International ASII. Such outsized positions contribute to the fund's top-heavy look. Indeed, 42.8% of assets resided in the fund's top 10 holdings as of Aug. 31, more than double the category norm. The portfolio didn't always sport such a high-conviction look, though. It held roughly 150 stocks in 2008, with smaller position sizes in the top 10, but shortly thereafter the managers decided to streamline it to 60-80 stocks. The fund's currency exposure is unhedged.
Performance Pillar:Negative | Karin Anderson 10/01/2012
An overweighting in materials, including a larger position in Vale, as well as struggling financial picks Itau Unibanco ITUB and PT Bank Central Asia have weighed on this fund in 2012, keeping its 7.4% gain behind roughly 80% of its emerging-markets peers for the year to date through Sept. 30. The fund ended 2011 in much better relative standing thanks to its outsize consumer staples stake, which provided some cushion during the down year. Its 15.9% loss stung on an absolute basis, but it was 4 percentage points less severe than the group norm.
The fund hasn't exhibited this type of performance pattern over the long haul, though. It fared a bit worse than the group norm in the late 2007 to early 2009 downturn, and it gained a bit more than the average when the markets took off on March 9, 2009, through the end of that year. Mixed results in various market conditions have led to uninspiring long-term results. Its 10- and 15-year returns lag the category average. In the past 10 years through September 2012, the fund lagged the category norm in roughly two thirds of three-year rolling periods. It fared worse versus the MSCI Emerging Markets Index, lagging the bogy in nearly three fourths of those periods
