We use a long-term approach to identify the beneficiaries of structural changes within emerging economies: high-quality, efficient and sustainable companies.
A concentrated portfolio with a high active share, invested with a long-term perspective.
The portfolio allocates across the market-cap spectrum.
Buying quality companies at a discount provides us with margin of safety in a volatile asset class.
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.
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.
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.
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.
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.
Kunjal Gala
Lead Portfolio Manager, Global Emerging Markets, Federated Hermes Limited
Kunjal Gala
Lead Portfolio Manager, Global Emerging Markets, Federated Hermes Limited
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Kunjal joined in February 2012 as a senior analyst on the Global Emerging Markets team focused on Asia ex-Japan. He became co-portfolio manager for pooled products and segregated mandates in September 2016. In January 2020, he became co-portfolio manager for all portfolios managed by the Global Emerging Markets team and was subsequently named lead portfolio manager in September 2020. Kunjal joined from Her Majesty's Government, where he worked from October 2008 as an assistant director in The Shareholder Executive, the in-house portfolio management and corporate finance arm of the UK Government. Prior to this he was a senior financial analyst at Morgan Stanley Investment Banking from December 2004, responsible for both business development and execution of M&A and strategy mandates within the consumer products coverage banking team. Previously he worked for Thomas Cook (India) in the management information systems division (September 2003), and PricewaterhouseCoopers in the Assurance and Business Advisory Service (August 2001). Kunjal has a Bachelor of Commerce from Mumbai University and is a qualified Chartered Accountant from the Institute of Chartered Accountants in India.
Vivek Bhutoria
CFA, Co-Portfolio Manager, Federated Hermes Limited
Vivek Bhutoria
CFA, Co-Portfolio Manager, Federated Hermes Limited
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Vivek joined in September 2019 as a senior analyst in the Global Emerging Markets team, focusing on idea generation across the Asia ex-Japan region. In January 2022, he also became co-portfolio manager for the Federated Hermes Global Emerging Markets Equity Fund. Vivek’s previous experience spans both the buy side and sell side. Prior to joining, he was a senior analyst with NN Investment Partners (formerly ING Investment Management) in the global emerging equity team. Vivek also worked at Deutsche Bank and BNY Mellon Asset Management covering emerging markets equities. Vivek began his career in accounting and held positions with PricewaterhouseCoopers and Ernst & Young. Vivek has a Master of Commerce degree from Mumbai University. He is a qualified Chartered Accountant (ACA) from the Institute of Chartered Accountants of India and a CFA charterholder.
