CAPTURING THE POTENTIAL OF EMERGING MARKETS WITH A BALANCED APPROACH TO RISK
The strategy seeks to deliver differentiated returns from emerging markets with a balanced approach to risk.
CLIENT BENEFITS
- Managed Risk Seeks to curb drawdowns during periods of volatility by investing in strong companies with wide economic moats and by balancing risk through three company style baskets. Stocks from countries with weak currencies are given higher return hurdles and lower portfolio weighting.
- Greater Return Potential Takes advantage of shifting EM value and growth opportunities through three-basket portfolio construction.
- Differentiated EM Performance A benchmark agnostic, high-conviction portfolio of 40-60 securities allows for differentiated performance.
APPROACH
Strong businesses at attractive valuations: A bottom-up, fundamental approach helps to identify companies with the broadest economic moats, which not only have the potential to survive market stress by being self-funding, but to thrive due to strong market position.
Balanced portfolio construction: High conviction ideas are placed into three style baskets that help balance factor risk. Managers rebalance the portfolio’s basket exposures to moderate the impact of changing market dynamics.
Currency risk awareness: Portfolio managers consider currency risk in the stock selection process. The return hurdle is raised in countries with riskier currencies and there is typically lower portfolio weighting in those markets.
