Swan Wealth Managers Ltd, a subsidiary of the SWAN Group, launched its new investment product, Swan Emerging Markets Fund this week. SWAN Emerging Markets Fund targets primarily Asian and Latin American countries. In this interview, Alvin Jeeawock, Manager of Investments of Swan Wealth Managers elaborates on the idea behind the creation of an Emerging Markets Fund. Mauritius, as a country that desires to forge ahead as a viable economy, will definitely benefit if invited to join such markets.
What is the idea behind the creation of an Emerging Markets Fund?
The representation of Emerging Market countries, in the global economy, has grown by leaps and bounds. According to PwC’s report, titled “The Long View — How Will the Global Economic Order Change by 2050”, Indonesia will have the fourth most powerful economy in the world by 2050. Emerging Markets is too large to be ignored. In addition to its fast-rising importance in the global economy, with the recent market correction, Emerging Markets today offer compelling value against both their evolving peers but also against its historic levels.
Why looking for Emerging markets?
Looking over the last 20 years, Emerging Markets not only recorded positive returns in 70% of the calendar years but has also outperformed its Developed counterparty in 65% of the calendar years. Emerging Markets represent a high potential of growth opportunities. For example, from 1999 to 2008, Emerging Markets recorded an average return of +12.6% (in USD), despite going through two crises (tech bubble in 2000 and global financial crisis in 2008).
Why is SWAN venturing in this area?
At SWAN, we are convinced that Emerging Market will be a powerful generator of performance in the coming years. Designed for new and skilled investors, SWAN’s Emerging Markets Fund is targeted at countries in Asia and Latin America. With these latest offers, SWAN, further positioning itself as strong non-banking financial services provider, offers a myriad of investment products and solutions. Indeed, Swan Emerging Markets Fund addresses this by offering its clients, a diversified portfolio of high-quality Emerging Markets funds, whilst reducing risk of fluctuations. Swan Wealth Managers has been a pioneer in Emerging Markets investment since 2004.
What kind of services will SWAN be providing?
We provide our clients with an innovative strategy that combines (i) the growth story/economic forces of Emerging Markets (ii) income distribution, and (iii) an integrated risk-controlled mechanism. With 321 ETFs listed and over 1,100 mutual funds that are focused on Emerging Markets countries, investment selection can often be quite cumbersome for investors.
In terms of contribution, what can the Emerging Markets bring to Mauritius?
The Fund is an open-ended investment vehicle that is set to grow over time. It is expected to reach Rs 100 M by the end of the first year and Rs 500 M by the end of Year 5. Given the recent sharp correction in international equities, including emerging markets (-32% in USD), we expect a rebound of 25% in USD terms over the next 12 months and 60% over the next three years.
What would be the most important transformation following the creation of the fund?
Swan Emerging Markets Fund builds on the strategy of Swan Wealth Managers Ltd to develop state-of-the-art solutions to meet the changing needs of our investors. We believe that applying a systematic, disciplined approach, with a strong team culture increases our ability to add value. Furthermore, given the anticipated size of the fund, this allows us to implement the investment strategy in a cost-efficient manner.
Looking over the last 20 years, Emerging Markets not only recorded positive returns in 70% of the calendar years but has also outperformed its Developed counterparty in 65% of the calendar years. Emerging Markets represent a high potential of growth opportunities."