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Coronation Global Emerging Markets Fund review 2022

Published by
Lethabo Ntsoane

The Coronation Global Emerging Markets Fund has the US dollar as its base currency. The fund invests in equities in emerging markets and it is suitable mainly for those that want to invest for the long term. Emerging markets include some countries in Asia, South America, and Africa. 

The fund also invests in South African equities and doesn’t shy away from doing so. As of July 2022, the fund has invested 11.27% of the fund in South African stocks. However, the fund chooses investments according to their potential. 

Coronation has active fund managers that ensure that the mandate of the fund is carried out. For their efforts, Coronation gets compensated by way of an annual management fee. This fee is currently 1.4% and changes from time to time, mainly due to the performance of the fund. 

There are other costs that an investor should be aware of when investing in the fund. The costs that are associated with transacting in the fund. These are charged at 0.18% and also vary from year to year. Another cost to be wary of is the fund expenses, which are currently levied at 0.11%.

The costs that the fund charges are reasonable considering the work that the managers put in. The fund has set the MSCI Emerging Markets Index as its benchmark. Outperforming this benchmark requires certain skills, which are acquired over time. 

The fund is one of the most interesting funds in the Coronation unit trust range. To better understand the fund, we provide you with a detailed analysis of the fund so that can assist you with insights into the fund. The fund is discussed in greater detail below. 

Coronation Global Emerging Markets Fund summary

The Coronation Global Emerging Markets Fund is a unit trust that invests in equities in emerging markets across the globe. The fund requires a minimum investment of $15,000.00, which is used to buy units in the fund. As of July 2022, the fund is valued at $1.05 billion. 

The fund has set the MSCI Emerging Markets Index as its benchmark. As per historic data, the fund has managed to grow by 39.85% since its inception. That is a 2.44% average annual growth from July 14th, 2008. 

On the other hand, the MSCI Emerging Markets Index has registered a growth of 46.92% during the same period. This is an average annual growth of 2.80%. The benchmark has outperformed the fund by 0.36% on average annually. 

The fund tends to have heavy fluctuations over time. This is seen from the fund’s historical data. The Coronation Global Emerging Markets Fund has recorded an all-time low of 40.8%, a feat that was achieved between May 2021 and April 2022.

Fluctuations can also go on the positive side and much higher. The fund has recorded an all-time annual increase of 106.2%, a feat that was achieved between March 2009 to February 2010. These fluctuations (both negative and positive) showcase how the fund can fluctuate to both extremes. 

The fund urges investors that invest in the fund to invest for no less than 10 years. This is to provide better returns for investors as the fund is able to absorb negative positions over the long term. Short-term investments may cause a partial loss of capital, which is something that the fund doesn’t advise. One can invest in the Coronation Jibar Plus Fund for short-term investments.

The fund’s portfolio is invested in a number of countries, and global political and economic conditions are likely to affect the fund. For a better outlook on the fund, we have compiled a list of countries and assets that the fund invests in. This information is provided in the table as follows. 

Coronation Global Emerging Markets Fund asset allocation per country

CountryTotal Allocation/Exposure
Equities:99.51%
China23.58%
Brazil12.56%
South Africa11.27%
South Korea10.08%
India9.98%
Taiwan6.98%
Germany4.73%
United Kingdom 3.84%
France3.69%
Argentina 2.33%
Others10.49
Cash0.49%
USD0.17%
Other0.32%

Four out of the fund’s five investments are in Brics countries, demonstrating the fund’s commitment to investing in emerging markets. Chinese investments have the largest stake in the fund and all investments are equity investments.

We have highlighted the top equities that the fund invests in so that you may better understand its makeup. These businesses are listed together with the country where they were founded. The Coronation Global Emerging Markets Fund’s top ten holdings are mentioned below.

Top 10 holdings by the Coronation Global Emerging Markets Fund

#Company NameFund percentage
1JD.com Inc Adr (China) 7.55%
2Prosus Na ( China) 4.83%
3Taiwan Semiconductor Man (Taiwan) 4.22%
4NAVER CORP (South Korea) 3.79%
5Samsung (South Korea) 3.77%
6Housing Dev Finance Corp (India) 3.63%
7Anglo American Plc (South Africa)3.5%
8Petroleo Brasileiro SA (Brazil) 3.42%
9AngloGold Ashanti Limited (South Africa) 3.22%
10Sendas Distribution (Brazil) 2.94%

Advantages of the Coronation Global Emerging Markets Fund

  • The fund is able to outperform its benchmark from time to time.
  • Long-term investments are more likely to receive above-average returns on investment.
  • The fund diversified across a different number of industries.
  • The fund utilizes fund managers that are experienced in managing funds that invest globally.

Disadvantages of the Coronation Global Emerging Markets Fund

  • The fund is highly volatile and can create capital losses for short-term investors.
  • The minimum contribution required is high for an average investor.

Conclusion

The Coronation Global Emerging Markets Fund provides lower returns than an average equity fund, yet it is able to protect capital in the long run. Those that have other investments and want a unit trust that invests in stocks in the emerging markets can find this investment of good use. 

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Lethabo Ntsoane

Lethabo Ntsoane holds a Bachelors Degree in Accounting from the University of South Africa. He is a Financial Product commentator at Rateweb. He is an expect financial product analyst with years of experience in reviewing products and offering commentary. Lethabo majors in financial news, reviews and financial tips. He can be contacted at lethabo@rateweb.co.za

Published by
Lethabo Ntsoane
Tags: Coronation
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