Global Emerging Markets Equity
Schroders’ Global Emerging Markets Equity strategy seeks capital appreciation primarily through investment in equity securities of emerging markets companies.
Schroders’ Global Emerging Markets Equity strategy provides exposure to a range of developing countries around the world. We believe that these countries are generally characterized by a stronger growth potential than mature economies which leads to the potential opportunity for premium returns. The investable universe is commonly defined by the MSCI Emerging Markets Index, which covers 24 countries and over 1,100 stocks.
The Global Emerging Market Equities team is made up of more than 45 investment professionals with an average of 14 years' investment experience. The team has a centralized asset allocation function in London, with stock analysts based in regional offices around the world. It is managed by Tom Wilson, who has been with the team for over 14 years.
We believe that emerging stock markets are inefficient and provide strong potential for adding value through active fund management. This value can be extracted through both country and stock selection. We believe that it is inappropriate to apply a systematic style bias across so many countries at such different stages of development. We believe that as fund managers we should manage both return and risk. Our aim is to achieve returns with the minimum level of risk through a proactive approach to risk management and a focus on the sustainability of returns. We believe that applying a systematic, disciplined approach, with a strong team culture increases our ability to add value.
Schroders has a balanced approach to investing in emerging markets. We use a mix of top-down analysis and bottom-up stock selection, looking to derive 50% of our added value from country allocation and 50% from stock selection. Our core investment process does not target any particular style bias and aims to outperform in most market environments.
Our investment process begins with the gathering and analysis of information on both countries and stocks. That information is then used to decide allocations for the portfolio. Country allocation is driven by a quantitative model, to which the team applies judgmental overlay in a controlled manner, while fundamental research forms the basis of the stock selection process. We have the resources to follow nearly all companies within our universe. It is this breadth of coverage, coupled with the local nature of our research that provides the means of generating unique investment ideas at the stock level.
- Targets 50% added value added from country and 50% from stock decisions
- Proprietary quantitative country model drives country decisions and detailed fundamental research drivers stock selection
- Rigorous active risk management including tracking errors and a stock stop-loss review policy, which are monitored continuously on several levels
- Significant global resources, including an experienced investment team based across eight locations worldwide