EM equities gathering momentum

Which trends and opportunities are most prominently reflected in your portfolio?

"We are one of the few EM equity managers that still do country allocation next to stock selection. Here we review countries that have a large weight in our strategies which include:

South Korea – we see very well-managed companies and are leading players within the industries that they are operating in, while they are trading at very attractive valuations. Also, the favorable election outcome will mean a continuation of the ‘Value Up’ program. This would mean better capital allocation, improved governance and higher dividends. This will reduce the valuation discount for the South Korean equity market going forward.

China remains an important market for us, where although growth has slowed down, there are still attractively valued opportunities. Given the breadth of the market, we have to be selective and avoid the more vulnerable pockets of the market. Hence, we are for example invested in various e-commerce and internet companies that are trading at very attractive valuations.

Taiwan, although valuations have re-rated, still provides us with good opportunities related to the information technology sector that remain critical for the AI revolution. Although India is enjoying one of the best macroeconomic outlooks in the emerging market universe, most of this story is already reflected in the equity market. Hence, we are more selectively positioned. We like the private sector banks and the IT software solutions providers where we still see some relative value. In We are one of the few EM equity managers that still do country allocation next to stock selection.

Here we review countries that have a large weight in our strategies which include: South Korea – we see very well-managed companies and are leading players within the industries that they are operating in, while they are trading at very attractive valuations. Also, the favorable election outcome will mean a continuation of the ‘Value Up’ program. This would mean better capital allocation, improved governance and higher dividends. This will reduce the valuation discount for the South Korean equity market going forward.

China remains an important market for us, where although growth has slowed down, there are still attractively valued opportunities. Given the breadth of the market, we have to be selective and avoid the more vulnerable pockets of the market. Hence, we are for example invested in various e-commerce and internet companies that are trading at very attractive valuations.

Taiwan, although valuations have re-rated, still provides us with good opportunities related to the information technology sector that remain critical for the AI revolution.

Although India is enjoying one of the best macroeconomic outlooks in the emerging market universe, most of this story is already reflected in the equity market. Hence, we are more selectively positioned. We like the private sector banks and the IT software solutions providers where we still see some relative value.

In Brazil, real rates are very high due to the expansionary fiscal stance and rising inflation. Approaching peak inflation rates, going forward, a rate-cut cycle can re-rate the market.

Then there are some smaller markets that have idiosyncratic drivers such as Greece, Indonesia, Vietnam, Mexico, UAE, Turkey and South Africa. Also, here we find very good opportunities that are trading at attractive valuations. , real rates are very high due to the expansionary fiscal stance and rising inflation. Approaching peak inflation rates, going forward, a rate-cut cycle can re-rate the market. Then there are some smaller markets that have idiosyncratic drivers such as Greece, Indonesia, Vietnam, Mexico, UAE, Turkey and South Africa. Also, here we find very good opportunities that are trading at attractive valuations."