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Emerging Market Fund ISAs

"By investing in the developing economic powerhouses of the 21^st century, emerging markets can offer the potential for long-term returns."

 

James Caldwell, Director

Emerging Market Fund ISAs

What are emerging markets?

Emerging markets or emerging economies are those which are currently going a period of rapid industialisation and growth, coupled with an upsurge in business activity. The seven largest emerging economies by GDP are China, Brazil, Russia, India, Mexico, Indonesia, and Turkey. However, many other markets can also classified as emerging - for example, investments in African economies are becoming more widespread, too.

Because they are growing and changing rapidly, emerging markets can seem like an attractive prospect to investors who are looking for long-term growth, as these markets are predicted to be major economic players later on in the 21^st century.

Why invest in an emerging market fund ISA?

• Emerging economies can offer the potential for long-term growth as new economies take centre stage in the worlds' financial markets.
• Emerging markets can be an exciting way to invest in new, up-and-coming businesses across the world - if you're already an experienced investor, they can offer an interesting addition to your portfolio.
• Well-researched emerging market funds have the potential to inject cash into economies where it's most needed. This can help to stimulate local job creation, encourage entrepreneurship, and increase standards of living.

Points to bear in mind when investing in emerging market fund ISAs…

• As well as offering higher potential returns, emerging markets are classed as higher risk investments than those in developed markets. Whether or not emerging market ISAs are right for you will depend on your investment goals and appetite for risk. Emerging markets can be riskier due to fewer local regulations.
• Don't assume that all emerging markets are the same - do your research. As economist Nouriel Roubini has pointed out, emerging markets should not be lumped together in terms of growth.
• As well as developing financially, many emerging economies are simultaneously going through major socio-political changes. There's always a risk that changes to the prevailing political climate or social structure could lead to economic instability and potential loss for investors. Change creates risk, but it also creates opportunity, both for businesspeople in emerging markets and those who want to invest in them.
• Not all emerging economies have a good track record when it comes to things like enforcing workplace health and safety regulations, upholding human rights, or preventing political corruption.
• Because you'll be investing internationally, it's important to bear in mind that your returns will be subject to fluctuations both in your own currency and the currency of the market you're investing in.  

You can compare a selection of emerging market funds that are eligible for ISA investment below, allowing you to make the most of your tax-efficient savings allowance while investing in developing economies across the globe.

Emerging Market Fund ISAs

Fund Manager	Fund	Fund Manager Initial Charge¹	Your Saving	Saving On ISA²	AMC³	Select Fund°	Fact Sheet	Apply Now
	First State Global Emerging Markets Leaders	0%	4.00%	£427	1.50% 1.30%		Factsheet	More Info >
	The Fund aims to achieve long-term capital growth. The Fund invests worldwide in large and mid capitalisation equities in emerging economies, including those of companies listed on developed market exchanges whose activities predominantly take place in emerging market countries. See latest fund factsheet for details.
	M&G Global Emerging Markets	0%	4.00%	£427	1.50% 1.30%		Factsheet	More Info >
	Aims to achieve a total return, a combination of capital growth and income, through investments in emerging market countries. See latest fund factsheet for details.

¹The Initial Charge after 100% of the Fair Investment Company Charge has been rebated as well as any fund manager discounts we can pass on to you if applicable.

²Based on 2011/12 ISA allowance of £10,680.

³AMC is the Annual Management Charge applied by the Fund Manager. By using our Fund Supermarket we can rebate up to 0.20% of the AMC back to you. This rebate is paid into a cash account which is set up for you when you first invest.

°Select Fund - Has a OBSR A Star Rating or more and a 100% initial charge discount.

 

Important Information: Investment in emerging market funds involves risk factors and special considerations which may not be typically associated with investing in more developed markets. Political or economic change and instability may be more likely to occur and have a greater effect on the economies and markets of emerging countries. Adverse government policies, taxation, restrictions on foreign investment and on currency convertibility and repatriation, currency fluctuations and other developments in the laws and regulations of emerging countries in which investment may be made, including expropriation, nationalisation or other confiscation could result in loss to the fund.