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GLOBAL EMERGING MARKETS EQUITY

Investing in long-term winners as emerging markets transform

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We use a long-term approach to identify the beneficiaries of structural changes within emerging economies: high-quality, efficient and sustainable companies.

Gary Greenberg & Kunjal Gala

Co-Portfolio Managers

WHY US?

Truly active management

A concentrated portfolio with a high active share, invested with a long-term perspective.

Multi-cap investing

The portfolio allocates across the market-cap spectrum.

Quality & safety

Buying quality companies at a discount provides us with margin of safety in a volatile asset class.

Responsible owner

Investing in companies throughout market cycles as an active owner and partner, we maintain a regular dialogue and encourage strong environmental, social and governance (ESG) practices.

From top to bottom

Bottom-up analysis finds quality companies trading at attractive valuations. This is rooted in a top-down framework that identifies countries with conditions supportive of growth.

WHY NOW?

The emerging-markets growth story is driven by an aspiring and growing middle class, increasing digitisation and development by governments through productivity-boosting reforms and infrastructure projects.

Our focus remains on long-term, structural drivers of growth: the rollout of 5G networks, application of the internet of things, rising financial penetration, healthcare and infrastructure development and growing consumer appetite for premium products.  We favour quality operating companies in these fields.

A vision for responsible long-term investing

Over the past decade, we have sought to act as responsible investors in emerging-market equities, and our goal is to create and manage portfolios of future-proof companies that can tackle sustainability challenges as they arise. We recognise that developing markets have a long way to go in this respect, but as responsible investors we can support their evolution over time. To find out more about our vision for responsible long-term investing, please read our commentary.

Investment philosophy and process

We seek high-quality, efficient and sustainable companies whose growth is supported by robust, defensible franchises. They typically generate a high return on equity and maintain strong balance sheets. By purchasing them at attractive valuations, we not only gain the potential to secure further upside, but also reduce the risk of capital loss. We also take into account the economic conditions in which companies operate, and favour emerging economies that provide environments supportive of growth.

We invest across the market-cap spectrum and have the flexibility to allocate decisively across regions, concentrating on markets that offer the best opportunities.

We also consider ESG factors as part of our risk analysis, and vet and investigate opportunities or potential threats to company performance. EOS at Federated Hermes, our global stewardship team, engages with key companies and regulators to influence corporate boards, regulators and industry bodies to act in the interests of long-term shareholders. The team votes at the annual-general meetings of our portfolio companies and provides support on ESG issues they are affected by.

Risk is also assessed at the stock, sector and country level through the ESG Dashboard, a proprietary risk-management tool developed by our Global Equities team.

Team

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Sales Contacts

Magnus Kristensen,
Director - Business Development, Nordics
Paul Voute,
Head of European Business Development