There are many emerging market funds available to investors and trying to identify what is different is often hard. On paper the fund has a good active share class (i.e., stocks different to the benchmark), and good upside and downside capture. The one area this fund does offer something different is its style tilt.
Coming into 2020 the strategy had a “growth tilt” and during that period, “growth, momentum and quality” provided excess returns and “value” negative returns. As we moved into the second half of 2020 they moved to a neutral position which saw a reverse in style performance with only value outperforming.
This means that they are not wedded to one style but use dynamic positioning across country, sector, and style to drive the returns. The other aspect interlinked with this is a macro view where they look to buy early cycle countries that are improving and sell late cycle countries that are deteriorating. How this looks is, coming into the first half of 2020, they were adding to China and Hungary and Consumer Staples and IT, and then reducing exposure to Korea and Mexico and Consumer Discretionary and Communication Services….read more