Staples, Industrials Prevented a Bloodbath for ALEAX


Nov. 20 2020, Updated 11:50 a.m. ET

Performance evaluation

The Aberdeen Latin American Equity Fund Class A (ALEAX) fell 3.5% in November 2015 from a month prior. In the three- and six-month periods ended November 30, the fund fell 5.2% and 18.9%, respectively. In the one-year period, it fell 30.0%, and from November’s end until December 24, the fund fell 3.4%. In the YTD (year-to-date) period, the one we’ll be analyzing, the fund has fallen by 24.6%.

The fund has been the third-best performer for all periods except the one- and three-month periods, in which it has been among the worst three performers out of the funds in this review. Let’s look at what has contributed to ALEAX’s performance in YTD 2015 through November.

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Portfolio composition and contribution to returns

ALEAX has the smallest track record among all the funds in this review. It has been in existence since only March 2013. According to its latest geographical disclosure, Brazil, Mexico, and Chile are its top three invested geographies, in that order, making up 92% of its assets.

Financials has been primarily responsible for the fund’s posting -24.6% returns in the YTD period ended November 2015. Financials contributed over one-third of the fund’s negative returns for the period. Of ALEAX’s financial stocks, Banco Bradesco (BBD) was by far the biggest negative contributor to returns. It was followed by Multiplan Empreendimentos Imobiliários.

Even though the materials sector formed only 4% of the fund’s assets, it emerged as the second-biggest negative contributor to returns, after financials. Vale (VALE) was responsible for most of the negative contributions from the sector.

Industrials followed, and were driven down by negative contributions from Graña y Montero (GRAM) and Localiza Rent a Car.

Grupo Aeroportuario del Sureste (ASR), and Grupo Aeroportuario del Centro Norte (OMAB) contributed positively to returns, thereby reducing some drag caused by negative contributors.

Reasons for performance

The primary reason the fund emerged as the third-best performer for the period was that some of its major stocks picks such as Embotelladora Andina (AKO.A) and Fomento Económico Mexicano (FMX)—both from the consumer staples sector—contributed positively to its returns, stopping it from venturing further into negative territory.

Now let’s look at our second fund in this review, the Epiphany FFV Latin America Fund Class A (ELAAX).


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