Polar Capital Emerging Markets Income has been the best-performing new fund over the past 12 months, losing out only marginally to emerging market powerhouses Aberdeen and First State.
However, the in-demand Aberdeen and First State portfolios have slowed inflows in recent months, leaving investors seeking another route to emerging market growth.
The £70.6m Polar portfolio, headed up by William Calvert, has returned 15.16 per cent over one year, while the sector has delivered 6.9 per cent.
Since launch in January 2011, it has returned 6.27 per cent, compared with a sector average loss of 10.29 per cent.
UBS Emerging Markets Equity Income has also delivered top-quartile returns of 9.84 per cent over one year. Since launch, the fund has made 1.64 per cent, while the sector is down 8.28 per cent.
The funds have also outperformed the MSCI Emerging Markets index, which has returned 6.21 per cent over one year.
Performance of funds vs sector and index over 1-yr
Source: FE Analytics
The £64.8m UBS fund is also the second-highest yielding in the sector, at 5.4 per cent, while the Polar Income fund currently pays out 3.8 per cent.
The Polar Emerging Markets Income fund is the least volatile of the two, and ranks sixth in the sector in terms of its Sharpe ratio over one year [0.96]. It is also one of the best funds in terms of Alpha – or value added to the benchmark – over the period, at 9.44.
Ben Seager-Scott, senior research analyst at Bestinvest, is paying close attention to the Polar fund due to its strong performance over its short life.
"It’s definitely on our radar," he said. "It’s attracting assets and it’s one to keep on your radar. But I wouldn’t use it as a replacement because it is an income fund. You’d look to use it more as an equity income play."
Seager-Scott adds that Calvert is a competent manager, but points out he had a period of underperformance while he was at AXA Framlington.
"I think he’s really trying to prove to the world he is having a return to form," Seager-Scott continued.
"The fund is up against launch and is adding value, but we’d look to see another year of that to show that he can pick stocks that deliver solid income."
According to FE Analytics, Calvert has outperformed his peer group composite over one, three, five and 10 years, delivering nearly 100 percentage points more over the 10-year period than his peer group composite, with returns of 305.34 per cent.
Performance of manager vs peer group composite over 10-yrs
Source: FE Analytics
The Dublin-domiciled Polar Capital portfolio has a total expense ratio (TER) of 1.78 per cent. The UBS fund has a minimum investment of £1,000 and a TER of 1.83 per cent.