Fund management groups which aggressively expanded their emerging-market investment teams over the past four years performed far better than groups which failed to grow at the same rate, a study shows.
London-based investment fund consultancy Fund Research found that in a survey of performance between September, 1992, and September, 1996, the fund management operation of Britain's Flemings was the poorest performer in a survey of 13 investment managers.
The group, which owns 50 per cent of Hong Kong-based Jardine Fleming, failed to expand its 11-strong emerging market team and the average performance of the group's funds over the same period produced returns of only 30.8 per cent.
In contrast, Schroder Investment Management saw the average performance of its funds return 90.5 per cent, having boosted by 212.5 per cent the number of emerging market investment professionals employed from 16 in 1992 to 50 in 1996.
'The investable universe has increased, more fund managers are trawling the markets for hidden value and as markets have matured and become more efficient, stock selection has become important, with the resultant need for greater research capability,' the study said.
'The search for the performance edge is more demanding and those management groups that are willing to meet the resources challenge are likely to win.' Fund Research analyst Janet Chisholm said that among the best performers were those funds which also adopted a bottom-up strategy towards investment, reducing risk by buying into strong companies or searching for undiscovered value.
