Grasping the most promising opportunities within the emerging universe
A concentrated and high conviction portfolio seeking high alpha generation across the diversified emerging market universe.
A Fund focused on selecting high-quality companies that offer attractive long-term growth prospects, with sound financials and sustainable profitability.
Calendar Year Performance 2014Calendar Year Performance 2015Calendar Year Performance 2016Calendar Year Performance 2017Calendar Year Performance 2018Calendar Year Performance 2019Calendar Year Performance 2020Calendar Year Performance 2021Calendar Year Performance 2022Calendar Year Performance 2023
+ 5.8 %
+ 5.5 %
+ 1.4 %
+ 18.8 %
- 18.6 %
+ 24.7 %
+ 44.3 %
- 10.8 %
- 15.7 %
+ 9.5 %
Net Asset Value
162.6 €
Asset Under Management
874 M €
Market
Emerging markets
SFDR - Fund Classification
Article
9
Data as of: 28 Mar 2024.
Data as of: 25 Apr 2024.
Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding possible entrance fees charged by the distributor). The return may increase or decrease as a result of currency fluctuations, for the shares which are not currency-hedged.
Emerging markets were up in March (+2.4% for the MSCI EM in euro), as were global markets as a whole. However, Chinese markets were stable. Early in the month, the government announced it would be targeting 5% growth over the year and trying to cap the deficit at 3% of GDP, but its optimism failed to convince investors. China continues to face structural problems despite a slight improvement in certain economic indicators. For example, the NBS manufacturing PMI rose to 50.8 in March from 49.1 in February, and inflation of +0.7% put an end to five months of deflation. India’s healthy economy points to growth of 6.5%, so local markets continued to perform well. Another beneficiary of geopolitical tension, the South Korean market also made up ground (+3.0% for the KOSPI in euro), largely thanks to its technology companies. In Latin America, the Mexican economy continues to benefit from the nearshoring of US production chains, and its manufacturing PMI remains in expansionary territory (52.2). Mexico’s local CPI was up 6.5% in euro.
Performance commentary
The Fund delivered a positive return, beating its reference indicator in March. Our Chinese portfolio helped shore up the Fund, largely as a result of our careful stock selection. Air transport solutions provider EHang performed excellently after publishing its results for Q4 2023 (up to CNY 56.6m from CNY 15.7m a year earlier). Our Chinese consumer discretionary stocks including JD.com, MINISO and Anta Sports were also up in March. Additionally, we remain exposed to the artificial intelligence theme, mainly through semiconductor companies Taiwan Semiconductor and Samsung Electronics. In Latin America, our Mexican portfolio appreciated thanks to contributions from industrial real estate company Vesta and banking group Banorte. However, our Brazilian positions, including Eletrobras, Equatorial and MercadoLibre were somewhat disappointing in March.
Outlook strategy
We remain optimistic for emerging markets over the rest of 2024. The vast emerging world presents numerous opportunities across all regions and sectors, as valuations are attractive. The Chinese authorities’ stimulus is starting to pay off despite structural problems. We are keeping a significant allocation to Chinese markets, taking advantage of market inefficiencies and the upside potential for consumer companies with strong balance sheets and valuations that do not fully reflect their underlying fundamentals or growth prospects. Nearly all of the Chinese companies in our Fund are leaders in their field, with high cash flows to sustain decent margins against the current backdrop of weak growth. We took advantage of the Chinese markets’ rally to reduce our exposure to China. Elsewhere in Asia, we are keeping our top holdings in the technology sector (Taiwan Semiconductor, Samsung Electronics), which are receiving impetus from the artificial intelligence trend. We also increased our exposure to the Indian market, opening a position on Macrotech Developers. This real estate company operates on a booming market in which construction is growing, has a business model with low capital intensity, and enjoys strong corporate governance, involving ambitious targets to reduce carbon emissions. We are remaining exposed to Latin America, and Mexico in particular, which are benefitting from structural trends such as reindustrialisation in North America. We are positioned on industrial real estate company Vesta in Mexico. Although we remain optimistic for emerging markets over the rest of 2024, we have reduced our regional bets to protect ourselves from geopolitical risks – most notably those attached to the US presidential election. The Fund is therefore focusing on its stock selection, concentrating its portfolio on growth and discounted stocks, with a particular emphasis on valuations and sustainability criteria.
The reference to a ranking or prize, is no guarantee of the future results of the UCIS or the manager.
The Fund is a common fund in contractual form (FCP) conforming to the UCITS Directive under French law.
The information presented above is not contractually binding and does not constitute investment advice. Past performance is not a reliable indicator of future performance. Performances are net of fees (excluding possible entrance fees charged by the distributor), where applicable. Investors may lose some or all of their capital, as the capital in the UCI is not guaranteed. Access to the products and services presented herein may be restricted for some individuals or countries. Taxation depends on the situation of the individual. The risks, fees and recommended investment period for the UCI presented are detailed in the KIDs (key information documents) and prospectuses available on this website. The KID must be made available to the subscriber prior to purchase.). The reference to a ranking or prize, is no guarantee of the future results of the UCITS or the manager.
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Market environment
Emerging markets were up in March (+2.4% for the MSCI EM in euro), as were global markets as a whole. However, Chinese markets were stable. Early in the month, the government announced it would be targeting 5% growth over the year and trying to cap the deficit at 3% of GDP, but its optimism failed to convince investors. China continues to face structural problems despite a slight improvement in certain economic indicators. For example, the NBS manufacturing PMI rose to 50.8 in March from 49.1 in February, and inflation of +0.7% put an end to five months of deflation. India’s healthy economy points to growth of 6.5%, so local markets continued to perform well. Another beneficiary of geopolitical tension, the South Korean market also made up ground (+3.0% for the KOSPI in euro), largely thanks to its technology companies. In Latin America, the Mexican economy continues to benefit from the nearshoring of US production chains, and its manufacturing PMI remains in expansionary territory (52.2). Mexico’s local CPI was up 6.5% in euro.