The £238m Schroder Asian Alpha Plus fund is a good bet for adventurous investors who are looking for a fund with the potential for high growth.

With returns of 135 per cent over the last three years the fund has been one of the most impressive of any of the 358 products with a focus on the world’s emerging regions. It is also top-decile in the Asia ex Japan sector over a 12-month period.

Performance of fund vs sector over 3-yrs



Source: FE Analytics

Only seven funds have achieved more, with most having done so by taking on much higher levels of volatility.

Although the fund’s highly concentrated portfolio is vulnerable to big losses – demonstrated by its poor performance in the aftermath of the Lehman crash – its annual volatility score of 19.92 per cent over three years is marginally lower than the 20.02 per cent from the sector average. This compares with 18.77 per cent from Aberdeen Emerging Markets.

The impending soft-closure of the Aberdeen fund in April has caused a headache for advisers who are carrying out extensive research to find a suitable replacement. There are few that can compete with Aberdeen on performance and even fewer with a three-year track-record – a prerequisite for most IFAs.

Juliet-Schooling Latter, head of research at Chelsea Financial Services, says that Schroder Asian Alpha Plus is one of the funds she has been looking at as a possible alternative.

"The fund is a bit higher risk but the track record has been very, very good since launch," she said.

"Manager Matthew Dobbs is unconstrained by sectors or regions and runs the fund with a predominantly bottom-up approach with a macro overlay."

"It’s a bit more focused than the emerging markets funds run by Aberdeen and First State but investors could use it along with a Latin America fund and it would cover all the bases in emerging markets. This would put some of the asset allocation decisions in the investor’s hands rather than a professional’s though."



Source: FE Analytics

She added: "We’ve also been looking at M&G Global Emerging Markets but the sector would benefit from a bit more choice. Another higher-risk option could be the UBS Asian Consumption fund. It is a very specialist play but could potentially be an interesting add-on to a portfolio if you are bullish on the story of growing wealth in China and other Asian countries."

The £15.7m UBS Asian Consumption fund only has a one-year track record but our data shows that it is the third-best performer in the Asia ex Japan sector, with returns of 12.49 per cent, behind Newton Asian Income and Aberdeen Global Asian Smaller Companies.

Performance of fund vs sector over 1-yr



Source: FE Analytics

Michael Godfrey and Matthew Vaight’s M&G Global Emerging Markets portfolio is underweight consumer products compared with the rest of the sector, in favour of basic materials. It has returned 104 per cent over three years.