Utilises a contrarian approach to invest in undervalued emerging markets companies positioned to benefit from a re-rating thesis for change.
Investment ObjectiveTo increase the value of its shares, over the long term, through growth in the value of its investments. The fund invests mainly in a widely diversified portfolio of stocks of emerging market companies.
- Aim to exploit the valuation anomalies that arise across the diverse and inefficient emerging market opportunity set.
- Employ a contrarian approach using fundamental research, quantitative screen and industry contacts to identify companies that are out of favour, undervalued and that offer an attractive risk and reward profile.
- Minimize the risk of value traps by focusing on companies offering yield or a book value anchor to the valuation, and where we have identified re-rating thesis that can lead to an expansion in valuation over time.
- Risk management is an integral part of the portfolio construction process.
- Environmental, social and governance ("ESG") factors with particular focus on those considered most likely to have a material impact on the performance of the holdings or potential holdings in the funds’ portfolio are assessed. These ESG factors, which are incorporated into the investment process alongside financials, valuation, macro-economics and other factors, are components of the investment decision. Consequently, ESG factors are not the sole driver of an investment decision but are instead one of several important inputs considered during investment analysis.
- Typically 50-80 stock portfolio
- Expected 4-8% tracking error
- Individual position typically 0.5% to 5%, position sized by prospective risks
- Country ranges +/-10% absolute deviation from the benchmark
- Sector ranges +/-15% absolute deviation from the benchmark
- Reserves are normally less than 5%, max 10%