The Barings Frontier Markets fund, launched in April 2013 and managed by Michael Levy and Manoj Shroff, has been closed effective 23rd September following a shift in attitudes towards Frontier Markets.
A spokesperson at Barings spoke to Citywire regarding the closure, highlighting the “changing attitudes towards the asset class, with investors increasingly choosing to integrate their Frontier allocations with Emerging Markets, as they challenge the definition of the asset class following a succession of country reclassification”.
The Barings Frontier Markets fund aimed to achieve long-term capital growth through investing in a diversified portfolio of Frontier Market equity securities using fundamental, bottom-up analysis. The fund returned 6.7% (before fees) over a three year period to the end of July 2019 versus its benchmark, the MSCI Frontier Markets Index, which returned 8.8% over the same period.
Vietnam and Kuwait held the largest country weightings in the fund with 21.1% and 16.1% respectively, while Kenya (7.2%), Nigeria (7.0%) and Bangladesh (5.2%) completed the top five. National Bank of Kuwait (9.75%), Safaricom (4.39%) and Vietnam Dairy Products (3.74%) were the top holdings in the fund.
The inclusion of Saudi Arabia and Argentina in the MSCI Emerging Markets Index changed the composition of the Barings Frontier Markets fund, while Kuwait’s pending promotion would have affected performance even further.