Emerging market stocks were buoyed in the third quarter by increased investor confidence as Europe took positive steps toward ending its fiscal crisis, Justin Leverenz, manager of the Oppenheimer Developing Markets Fund, noted in his third-quarter commentary.
This produced uneven performance among various sectors in the emerging markets: technology stocks rose and utility stocks lagged while the materials sector – which usually would rise in this climate – notched only lukewarm gains amid continued concern over a slowdown in China.
"Against this backdrop, the Developing Markets Fund slightly underperformed its benchmark," Leverenz wrote. "This was in contrast to the strong outperformance posted during the second quarter. The fund can often lag in sharp rallies....when investors focus on the short-term gain potential of companies whose prospects are heavily levered to the business cycle." In contrast, the fund's investments are selected to perform well in difficult markets as well as over the long term.
For the quarter, the fund was up 7.1 percent, slightly behind the MSCI EM index return of 7.7 percent. Over the past year, the fund has gained 20.2 percent vs. the benchmark return of 16.9 percent.
To read Leverenz's full commentary, click here.
Oppenheimer Developing Markets is a component of the Bradway Strategic Portfolio, which consists primarily of investments with top money managers.
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