Australian investors can access emerging markets in Brazil, Russia, India and China (BRIC) for the first time with two new funds from the Macquarie Group.
The actively managed Macquarie-Globalis BRIC Advantage Funds have investment guidelines to diversify exposures and the potential for high growth and high volatility.
Globalis Investments, a specialist emerging markets manager established through a joint venture between the Macquarie Group and OneWorld Investments, will manage the fund's unhedged version.
About a dozen BRIC funds exist globally with around US$12 billion invested, according to Globalis Investments chief executive officer and portfolio manager David Dali.
"Three-quarters of the world's population lives in emerging markets, 40 per cent of the world's population lives in a BRIC country, half of the BRIC population is under the age of 30. Demographics are a big part of it," Dali said.
The funds are aimed at investors who want to capitalise on the growth potential of BRIC, want a diverse portfolio, long term investment and daily liquidity, but who can accept potential volatility.
Macquarie executive director Peter Lucas said: "Rather than attempting to pick individual stocks in emerging market countries, Globalis will focus on fundamental country analysis with the broader global macroeconomic and geopolitical environment. We believe this will result in a more liquid, flexible and scalable short, medium and long term value investment in emerging markets."
The unhedged fund aims to outperform the MSCI Emerging Markets Index after fees over the long term. It will be managed by Globalis and may invest up to 100 per cent in US dollar denominated cash deposits.
The hedged fund objective is to invest in the unhedged fund and substantially hedge the US dollar value of its units in the unhedged fund back into Australian dollars.
Institutional investors have already committed $35 million to the funds.
