Hefty losses at foreign funds with holdings in Sri Lankan equities
Foreign mutual funds which have exposure to Sri Lankan equities have posted steep losses in their net asset values this year, prompting their fund managers to look for ways to trim their holdings and switch to alternative markets.
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According to Refinitiv Lipper, the top eight overseas funds that have exposure to Sri Lanka have dropped 14.8 per cent this year on average. That’s a lot better than the Sri Lanka’s CSE All-Share index’s decline of 38 per cent so far in 2022.
YTD performance of funds exposed to Sri Lankan equities
The Tundra Sustainable Frontier Fund A SEK, which had about 3.14 per cent exposure to Srilanka, has lost 10.52 per cent this year, while Harvest Asia Frontier Equity J JPY Acc and Holberg Rurik A declined 9.6 per cent and 14.5 per cent, respectively.
“During 2022, it(Sri Lankan exposure) has negatively impacted our performance by ca 3 per cent (USD),” said Mattias Martinsson, chief investment officer at the Swedish fund manager Tundra Fonder AB. “Our stock-selection in Vietnam and Indonesia has helped us to outperform our benchmark (MSCI FMxGCC Net TR) despite the negative impact from Sri Lanka,” he said.
Overseas funds that have holdings in Sri Lankan equities have also faced sharp outflows in the past few months.