Our disciplined investment process aims to harness the inefficiencies resulting from market biases in emerging markets. We employ a) active country allocation to capture differences in risk and opportunities between countries; b) fundamental stock selection analysis that maintains a long-term investment view to uncover structural drivers; c) quantitative models as a tool to exploit the behavioral biases of market participants; d) a value bias as we identify undervalued opportunities where the structural earnings outlook is not yet appreciated by the market.
The investment process starts with active top-down country allocation, where we identify the positive and negative macro drivers across different emerging markets. Around 80% of the portfolio is invested in the top five most attractive countries. Stock selection in a specific country is based on these macro drivers, the proprietary quantitative stock selection model and an in-depth fundamental company analysis to identify those stocks with the ability to outperform in the long run. The focus is on companies with a sound business model, solid growth prospects and a reasonable valuation.
The strategy is managed by a dedicated team of EM specialists with specific country and sector coverage. The EM team is embedded in Robeco's Global Fundamental Equities group of 65 investment professionals, including the Asia Pacific team based in Hong Kong and Shanghai.
Our approach: We consider active country allocation to be instrumental when investing in emerging markets and an essential part of the fundamental bottom-up stock selection process.
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