INDEX
MANAGEMENT

Our Henderson Rowe RAFI Emerging Markets Fund is
now available on a number of leading platforms.

WHAT WE DO

FTSE RAFI® EM Fund For Professional/Institutional Investors Only

The FP Henderson Rowe FTSE RAFI® Emerging Markets Fund is managed to track the returns of the “fundamentally weighted” FTSE RAFI® Emerging Markets Index.

This index comprises the 350 largest EM companies fundamentally weighted by an average of sales, cash flow, net book value and dividends. This methodology addresses some of the known shortcomings of market capitalisation weighting whilst retaining the benefits of indexation; low costs, large investment capacity and broad sector and geographical representation.

The AMC for the A share class: 47bps.
The AMC for the B share class: 27bps.

Class Type ISIN SEDOL MEXID CITI Bloomberg Morningstar
A Acc GB00B4TW6408 B4TW640 2FIHEA 0A7S IFDSEMA:LN F00000NAGY
B Acc GB00B4X90018 B4X9001 2FRFEM 0A7T IFDSEMB:LN F00000NAGZ

Developed western economies face big deficits, poor demographics and massive indebtedness. Emerging markets, traditionally regarded as “risky and adventurous”, typically formed a small part of a diversified investment portfolio. No longer. Emerging markets account for at least 40% of global GDP and their economies are strong and growing, arguably offering a more stable and secure home for defensive investors than the Western developed economies. We believe this fund offers an excellent core EM exposure in a sensible and well priced format.

Please click here to download the prospectus and application forms.
Please click here to download the latest ‘A’ share factsheet.
Please click here to download the latest ‘B’ share factsheet.

If you have any questions about dealing in this fund, or questions about the management of the fund please reply by email or ring us on 020 7907 2200.

HOW WE DO IT

Some investors are moving away from traditional market capitalisation-based indices to alternative strategies, known as smart beta, in search of better returns and lower costs amid volatile markets and an uncertain economic climate.

Smart beta is a rather elusive term in modern finance. It lacks a strict definition and is also sometimes known as advanced beta, alternative beta or strategy indices.

It can be understood as an umbrella term for rules based investment strategies that do not use the conventional market capitalisation weights that have been criticised for delivering sub-optimal returns by overweighting overvalued stocks and, conversely, underweighting undervalued ones.

Smart beta strategies attempt to deliver a better risk and return trade-off than conventional market cap weighted indices by using alternative weighting schemes based on measures such as volatility or dividends. [2]

Smart beta refers to an investment style where the manager passively follows an index designed to take advantage of perceived systematic biases or inefficiencies in the market. It therefore costs less than active management, since there is less day-to-day decision-making for the manager, but since it will, at the very least, have higher trading costs than traditional passive management (which minimises those costs), it is a pricier option. [3]

Among the best known alternatives to market cap weighting are the fundamentally weighted indices developed by Research Affiliates in 2005 which rank their constituents by book value, dividends, sales, and cash flow.

However, even a naive weighting scheme such as equally weighted indices can be described as smart beta.

Interest in smart beta indices has been fuelled by the global financial crisis of 2007-08 which prompted many investors to become more focused on controlling risks than simply maximising their returns.

One of the key attractions of smart beta is that it is less expensive for investors to evaluate the worth of these strategies than to analyse and monitor the performance of active managers.

Smart beta can also be understood as the returns that can be generated from illiquid or private markets such as real estate and infrastructure which offer attractive risk return trade-offs and which can provide important diversification benefits when added to a conventional portfolio of equities and bonds.

 

IMPORTANT INFORMATION

FP Henderson Rowe Index Funds (the “Company”) is an Investment Company with variable capital incorporated in England and Wales under registered number IC000864 and is authorised by the Financial Conduct Authority (the “FCA”) with effect from 6 December 2010 and launched 30 November 2011. Fund Partners Limited is the Authorised Corporate Director (the “ACD”) of the Company and is authorised and regulated by the Financial Conduct Authority. Registered Office: Cedar House, 3 Cedar Park, Cobham Road, Wimborne BH21 7SB.

Henderson Rowe has been appointed as the Investment Manager and distributor in respect of the Company. Applications for shares in the Company are subject to the Principal Prospectus, Simplified Prospectus and Instrument of Incorporation of the Company. Investors and potential investors are advised to read these documents (and in particular the risk warnings) before making an investment in the Company. Copies are available free of charge on request from the ACD and Henderson Rowe.

Unless otherwise specified, Henderson Rowe is the source of all data. All information contained in this material is current at the time of issue and, to the best of our knowledge, accurate. Any opinion expressed is that of Henderson Rowe, is not a statement of fact, is subject to change and, unless it relates to a specified investment, does not constitute the regulated activity of “advising on investments” for the purposes of the Financial Services and Markets Act 2000.

The value of investments and the income from them can fall as well as rise and is not guaranteed. You may not get back the amount originally invested. Any forecast, projection or target is indicative only and not guaranteed in any way. Any past performance figures are not necessarily a guide to future performance. Any reference to returns linked to currencies may increase or decrease as a result of currency fluctuations. Any references to tax treatments depend on the circumstances of the individual client and may be subject to change in the future.

The FP Henderson Rowe FTSE RAFI® Emerging Markets Fund is not in any way sponsored, endorsed, sold or promoted by FTSE International Limited (“FTSE”), by the London Stock Exchange Plc (the “Exchange”), The Financial Times Limited (“FT”) or by Research Affiliates LLC (“RA”) (collectively the “Licensor Parties”), and none of the Licensor Parties make any warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the FTSE RAFI® Emerging Markets Index (the “Index”) and/or the figure at which the said Index stands at any particular time on any particular day or otherwise. The Index is compiled and calculated by FTSE in conjunction with RA. None of the Licensor Parties shall be liable (whether in negligence or otherwise) to any person for any error in the Index and none of the Licensor Parties shall be under any obligation to advise any person of any error therein.

FTSE® is a trade mark of the Exchange and the FT. Fundamental Index® and RAFI® trade names patented and patent-pending concepts are the exclusive property of Research Affiliates®, LLC US Patent Number 7,620,677. Patent pending: US-2005-0171884-A1, US – 2006-0015433-A1, US-2006-0149645-A1, US-2007-00555598-A1.

Issued by Henderson Rowe, a company incorporated in England and Wales under registered number 04379340 and with its registered office at: 1 London Street, Reading, Berkshire RG1 4PN; Tel 0207 907 2200. Authorised and regulated by the Financial Conduct Authority, 25 The North Colonnade, Canary Wharf, London E14 5HS.

HOW TO INVEST

Our Henderson Rowe RAFI Emerging Markets Fund is now available on a number of leading platforms.

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NEWS &
VIEWS

CIO Giles Rowe and the Henderson Rowe research team
provide their latest market and stock insights.

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