GLOBAL - International equity managers, bolstered by emerging markets returns, have outperformed in the second quarter, new figures from InterSec Research Corp claim.
Emerging markets as a whole returned 4.1% for the quarter and the median manager weighting in emerging markets was 5.0% at the end of June.
The global asset management consultant said the out performance was driven by a “small handful of aggressive growth managers” within the overall International Growth peer group.
It also added that these “aggressive managers tend to produce very strong returns during periods of growth out performance”.
“This quarter provided some relief for growth managers that have been languishing against the broad index for an extended time” said Brendan Cooper, InterSec’s head of analytics.
The median manager in the InterSec peer group of EAFE Plus products, invested on behalf of US tax-exempt institutions, ended with a 0.4% loss compared to the 1.0% loss of the MSCI EAFE index for Q2 2005.
Individual manager returns ranged from 1.5% to -1.9%, while active returns were enhanced by opportunistic emerging markets investments which are allowable investments for most managers.
According to Intersec, at the end of June 2004 the average manager’s Emerging Markets exposure was just 3.6% of their total portfolio but the allocation to emerging markets had been increasing steadily.
Gains were also generated in the Japanese stock market, where mostmanagers outperformed the index which is generally comprised of more mid and small cap companies than most portfolios.
For the year to date through June, the median manager has lost 0.5% versus the EAFE index loss of 1.2% with manager returns ranging from 3.2% to -2.9%.
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