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BNP Paribas IP scraps BRICs strategy amid funds merger

BNP Paribas IP scraps BRICs strategy amid funds merger

BNP Paribas Investment Partners will merge away its BRICs-focused equity fund after asset fells below a workable level, Citywire Selector has learned.

This will see the BRIC fund merged into a wider emerging market fund, both of which are run by Donald Smith.

The $66.4 million Parvest Equity Bric fund will formally be merged into the $796.7 million Parvest Equity World Emerging fund on the 7 October.

In a letter to shareholders seen by Citywire Selector BNP Paribas said that assets in the Parvest Equity Bric fund had hit their lowest levels since January 2007.

In addition, those who wanted to remain invested in emerging markets currently prefer to allocate to global emerging market strategies instead of just Brazil, India, Russia and China.

A spokesperson for the asset manager said the fund range was regularly reviewed to ensure the optimum client offering. This can sometimes result in mergers, as is the case with the two emerging market funds.

Both funds are managed by the Boston-based GEM equities team and the Parvest Equity World Emerging fund is registered for sale in a wider range of countries than the Parvest Equity Bric fund.

Over three years to the end of August 2016, the Parvest Equity Bric fund rose 11.53% in US dollar terms. This compares to a rise of 7.02% by its Citywire-assigned benchmark, the MSCI BRIC TR USD, over the same time frame.

Meanwhile, the Parvest Equity World Emerging fund returned 4.95% over three years to the end of August 2016. This compares to a rise of 4.50% by its Citywire-assigned benchmark, the MSCI EM (Emerging Markets) TR USD.

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