Allianz RCM BRIC Stars fund

Andy Parsons, Advice team manager at The Share Centre, explains how investors looking for exposure to Brazil, Russia, India and China as well as other emerging markets, could benefit from the Allianz RCM BRIC Stars fund.

"The Allianz RCM BRIC stars fund aims to achieve long-term capital growth by investing predominately in the equity markets of Brazil, Russia, India and China. As such, the fund is suitable for investors seeking exposure to emerging markets and taking a long-term view.

"The fund is managed by Michael Konstantinov and is based on the idea that BRIC countries will be economic superpowers in the next decade. Traditionally, these countries have relied somewhat on demand from the US and Europe. However, western developed economies are starting to display signs of slowing growth.

"Meanwhile, internal consumer demand is increasing among BRIC economies and these countries have also increased trade amongst themselves. The belief is that BRIC economies will eventually come into their own and even decouple.

"In order to select the best investment opportunities in each country, Konstantinov benefits from working closely with the group's offices in Latin America, Moscow and Singapore; the latter two being based locally. In respect of India, he liaises with the group's India specialist. In addition, Konstantinov has access to the Group's global analysts and macroeconomic department.

"In terms of performance, the fund suffered like many others during the severe economic downturn of 2008. However, 2009 has seen a strong recovery with the fund returning a year-to-date return of 75.67 per cent compared to its sector average of 28.73 per cent. The fund is currently rated ‘A' by OBSR.

"BRIC economies have the potential to provide excellent long-term growth prospects and provide increased diversification to a well rounded portfolio. Investors should note that funds such as this should never make up more than a small percentage of a portfolio as they may often demonstrate significant volatility."