High growth fund ideas

bowlhead99

ColdIron wrote: »

I've been dancing around VOF for a number of years but haven't committed myself to date. I believe Vietnam has a lot of potential but has corruption/transparency issues not to mention a communist government. Watch out for the high 4.44% OCF, fine when it's share price is rising but a real millstone in flat or falling years

Vietnam hasn't been a star performer within emerging markets / frontier markets generally. I hold the fund as I do like spreading my money far and wide, but don't have a lot in this one.

They have two pools of capital on which they charge performance fees - real estate and other. If the OCF figure you're reading includes performance fees (which it shouldn't, but places like HL do include it in their own definition) then you're going to get the impression that it's very expensive when both those pools go up significantly in value - but of course in the flat or down years (or even positive years that don't meet the 8% hurdle rate) it isn't a "millstone" as you won't be paying the charge.

Of course, with or without performance fees it's not a cheap fund, but nobody would buy it for being a cheap fund, they'd buy it for access to a market that they couldn't access themselves directly. As with other funds that hold potentially hard to value or illiquid assets, the shares are priced lower than the alleged valuation of the underlying assets, so the discount you get on buying in means you have more money at work than you pay for.

cashbackproblems wrote: »

Thanks for the VinaCapital Vietnam Opportunity Fund Ltd (VOF) recommendation - exactly the type of thing im interested in!

If you like obscure funds that are somewhat underperforming for the risks you're taking then you could also take a look at another I hold.

https://www.fondulproprietatea.ro/home.html

You said not interested in UK/Europe but the eastern parts of emerging Europe are hardly stacked with your boring mainstream Nestle, InBev, Tesco type stuff.

cashbackproblems

Voyager2002 wrote: »

Russia is one of my interests for investing...

I think that if you look at the P/E ratios then Russia is very far from being priced too highly. That suggests that there is not much scope for a correction, but of course there is a very high degree of political risk.

You also mentioned an ETF, yet Russia is the kind of environment where a good manager might add considerable value. At one point I used the Morningstar "compare" tool to look at Funds and ETFs in Russia: what was striking was that fund managers seemed to deliver similar levels of growth to ETFs but at considerably lower risk, and so gave far higher Sharpe ratios.

Of course, if you really want a high-risk "punt" then how about Neil Woodford's Patient Capital IT? I like the underlying thesis, and it is now at a pretty hefty discount.

what product do you use to invest in Russia?

cashbackproblems

http://www.hl.co.uk/shares/shares-search-results/v/vietnam-enterprise-investments-usd0.01di


this looks better for Vietnam than the one recommended above

chrisgg

Some left field picks here, though these aren't for the faint hearted investor!

Downing Micro Cap Trust - this fund invests in a highly concentrated portfolio of very small UK companies, that the fund's team work closely with to ensure they maximise their growth potential.

Baillie Gifford Shin Nippon - Management have a good track record of picking smaller companies with great growth potential. It is highly geared so has high volatility bu the potential to deliver high returns. Additionally Japan is now in its longest period of growth since the 80s, employment is high and factories there are benefiting from increasing automation.

BlackRock Emerging Europe - this is an area where valuations are lower than Europe in general, whilst the economies of the ex Eastern bloc countries such as Czech Republic, Hungary and Romania are decreasing unemployment and robust economic growth. Looks an appealing long term shot at a discount to NAV of 6%.