Canadian emerging market fund impresses on every count

This week: a focus on AGF Emerging Markets Fund. Following a clean-up of data within the ‘Global Equity' section, our table-topping fund for five years with a cumulative performance of 126 per cent is the Canadian-based financial services firm AGF and their Emerging Market Fund.

The AGF Fund doesn't actually appear in our 52-week cumulative performance where their 20-per-cent-plus for the year to date (YTD) is only just ahead of the Emerging Market peloton (MSCI Emerging Markets at 17.09 per cent YTD).

Defining consistency at the top of any performance tree is always fraught with danger. So, what do we know about the AGF Emerging Market Fund? Let's start with the fact that our "clean-up process" included taking out any fund which had over 50 per cent of its equity selection in any one country.

Secondly, we know that Emerging Market Funds were clearly going to dominate over the mature market equity funds because of the domination of the MSCI Emerging Market index over its All World equivalent over five years (see Box 1).

The not-so-obvious insights might include the following four features, all of which can be gleaned from the fact sheet. Firstly, History. The Fund Manager: Patricia Perez-Coutts has been with the fund since June 2002, an eight-year track record which is above the average tenure (we are told by Multi-managers RMB) for a fund manager. A positive? The fund has a history therefore, and started in 1994, a time when the allure of emerging/developing stories wasn't as shiny as it is now.

Secondly, Fact Sheet: I like the fact sheet. A couple of pages of easy-to-read and to-the-point data. As a result, readers will know that the fund is designed for "aggressive investors". The risk appetite is clearly defined as "high" with a focus on both large and mid-cap stocks which (given its clear intention to delve in developing markets) is obviously high risk! This would help explain the 44 per cent (the alpha) gap between the market at 5 years (MSCI Emerging 82 per cent) and the table-topping 126 per cent.

Thirdly, bottom-up stock selection. The fact sheet is clear on the ‘bottom up' nature of selections together with insight as to which stocks they rely on within its composition risk (weight). Much explanation covered in a couple of tables. See tables (Boxes 2 & 3).

Ultimately, I am not a fan of fact sheets that go past two pages. This one does the trick on both the information and performance basis, which is perhaps why, feature number four: fund size, indicates its popularity. As of June 2010, the fund was $1.213 billion. That's huge.

 The writer is the chairman of Mondial Financial Partners.