switzerlanden
Staying the course and being selective reaps long-term rewards in EM

Staying the course and being selective reaps long-term rewards in EM

08-04-2020 | Insight
Emerging markets equity strategies with their value tilt should typically underperform in risk-off markets. However, over the many years that our team has been in place, we have learnt to use market over-reaction to find opportunities.
  • Fabiana Fedeli
    Fabiana
    Fedeli
    Global Head of Fundamental Equities
  • Jan de Bruijn
    Jan
    de Bruijn
    Client Portfolio Manager

Speed read

  • March 2020 sell-off worse than August 2015 but better than October 2008
  • We have seen this before: this is where we find the best opportunities
  • In last 20 years, our strategies outperformed after extreme sell-offs

Over the last 20 years, our emerging market strategies have often generated positive relative returns following periods of extreme risk-off, outperforming the index over the investment cycle. We continue to adhere to our investment process, gradually changing our positioning wherever superior risk-reward prospects emerge.

The most common mistake that value investors make in economic downturns is to get into value traps, i.e. companies that will either take longer to recover or will never recover. Balance sheet strength and earnings outlooks remain key.

Robeco’s emerging markets equity strategies are well positioned to benefit when the market recovers. In a rebound, the tide will lift all boats, but once the impact of the crisis on earnings becomes clear, we will be able to distinguish winners from losers. Our investment process is inherently designed to unearth those stocks for which we believe the market is mispricing the future earnings potential.

Our track record shows that this type of portfolio tends to outperform when the market recovers after a crisis. The economic cycle will differ a lot from region to region, since North Asia went into the economic slump earlier than the rest of the world. China, Taiwan and South Korea have for now tackled the virus and are gradually recovering. It is really a first in-first out phenomenon that could result in large discrepancies between countries’ economic and financial performances.

Stay informed on our latest insights with monthly mail updates
Stay informed on our latest insights with monthly mail updates
Subscribe
Logo

Disclaimer Robeco Switzerland Ltd.

The information contained on these pages is for marketing purposes and solely intended for Qualified Investors in accordance with the Swiss Collective Investment Schemes Act of 23 June 2006 (“CISA”) domiciled in Switzerland, Professional Clients in accordance with Annex II of the Markets in Financial Instruments Directive II (“MiFID II”) domiciled in the European Union und European Economic Area with a license to distribute / promote financial instruments in such capacity or herewith requesting respective information on products and services in their capacity as Professional Clients. 

The Funds are domiciled in Luxembourg and The Netherlands. ACOLIN Fund Services AG, postal address: Affolternstrasse 56, 8050 Zürich, acts as the Swiss representative of the Fund(s). UBS Switzerland AG, Bahnhofstrasse 45, 8001 Zurich, postal address: Europastrasse 2, P.O. Box, CH-8152 Opfikon, acts as the Swiss paying agent. The prospectus, the Key Investor Information Documents (KIIDs), the articles of association, the annual and semi-annual reports of the Fund(s) may be obtained, on simple request and free of charge, at the office of the Swiss representative ACOLIN Fund Services AG. The prospectuses are also available via the website www.robeco.ch. Some funds about which information is shown on these pages may fall outside the scope of the Swiss Collective Investment Schemes Act of 26 June 2006 (“CISA”) and therefore do not (need to) have a license from or registration with the Swiss Financial Market Supervisory Authority (FINMA). 

Some funds about which information is shown on this website may not be available in your domicile country. Please check the registration status in your respective domicile country. To view the RobecoSwitzerland Ltd. products that are registered/available in your country, please go to the respective Fund Selector, which can be found on this website and select your country of domicile. 

Neither information nor any opinion expressed on this website constitutes a solicitation, an offer or a recommendation to buy, sell or dispose of any investment, to engage in any other transaction or to provide any investment advice or service. An investment in a Robeco Switzerland Ltd. product should only be made after reading the related legal documents such as management regulations, prospectuses, annual and semi-annual reports. 

By clicking “I agree” you confirm that you/the company you represent falls under one of the above-mentioned categories of addressees and that you have read, understood and accept the terms of use for this website.

I Disagree