United States - Institutional
Global Emerging Markets Equity Strategy
INSTITUTIONAL
INVESTMENT OBJECTIVE:
The Coronation Global Emerging Markets Equity Strategy provides access to the best investment opportunities in Global Emerging Markets. It aims to deliver capital growth through a focused equity portfolio of securities of companies based in emerging markets or that derive a significant portion of their business from emerging economies. The objective is to outperform the MSCI Emerging Markets Index over 5 years and longer periods.
Coronation’s investment philosophy aims to produce outperformance by focusing exclusively on the long term. We conduct our own research to determine what a share is worth (its ‘fair value’), and only invest if the current price is sufficiently below this level, thereby offering some margin of safety. We focus on what a business will earn in a ‘normal’ environment over the long term (which is often many years from now) and what investors, in our view, should be willing to pay for such an earnings stream today. This allows us to ignore short term ‘noise’, which is a key competitive advantage since shares often trade on near-term earnings prospects instead of long term earnings power. Given the large investable universe, we have a preference for above-average businesses – those that exhibit a combination of key factors such as sustainable competitive advantage, pricing power, decent returns on capital and high cash generation abilities – but our decision to invest will always be based on whether there is sufficient margin of safety relative to the risks of each investment case. Our portfolios are fairly concentrated (50-60 stocks) and reflect our high-conviction ideas prominently. They are constructed without any reference to the benchmark, so short term portfolio returns will differ materially - whether positive or negative - from those of the benchmark. Over a more meaningful performance measurement period of at least five years, our focus on owning only undervalued shares should, in our view, deliver performance in excess of the benchmark. The primary method of risk control is only owning stocks that trade well below fair value to ensure there is no permanent loss of capital from owning overvalued shares. Additionally, our portfolios are constructed such that there is no excessive exposure to any one country, industry or other single identifiable factor that can have an unexpected and outsized impact on portfolio returns.
The above graph is provided for illustrative purposes only. It reflects composite performance of the strategy and is gross of fees.
| STRATEGY RETURNS GROSS OF FEES | |||
|---|---|---|---|
| STRATEGY | BENCHMARK* | OUTPERFORMANCE | |
| Since Launch (unannualised) | 125.2% | 63.2% | 62.0% |
| Since Launch (annualised) | 5.1% | 3.0% | 2.1% |
| Latest 10 years (annualised) | 1.8% | 3.5% | (1.7)% |
| Latest 5 years (annualised) | 1.5% | 3.9% | (2.4)% |
| Latest 3 years (annualised) | (5.1)% | (1.4)% | (3.7)% |
| Latest 1 year | 28.6% | 25.3% | 3.3% |
| Year to date | 13.2% | 11.7% | 1.5% |
| Latest 3 months | 8.2% | 3.6% | 4.6% |
| Latest 6 months | 6.7% | 8.6% | (1.9)% |
| Month | (3.2)% | (4.4)% | 1.2% |
* MSCI Emerging Markets Total Return (net) Index (Bloomberg ticker: NDUEEGF)
The performance shown is gross of fees. Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. The volatility of the MSCI Daily TR Net Emerging Markets USD (NDUEEGF Index) represented above may be materially different from that of the Global Emerging Markets Equity Strategy. In addition, the holdings in the accounts comprising the Strategy may differ significantly from the securities or components that comprise the MSCI Daily TR Net Emerging Markets USD (NDUEEGF Index). The MSCI Daily TR Net Emerging Markets USD (NDUEEGF Index) has not been selected to represent an appropriate benchmark to compare the Global Emerging Markets Equity Strategy's performance, but rather is disclosed to allow for comparison of the Strategy's performance to that of a well-known and widely recognized index.
| STRATEGY RETURNS NET OF FEES | |||
|---|---|---|---|
| STRATEGY | BENCHMARK* | OUTPERFORMANCE | |
| Since Launch (unannualised) | 82.1% | 63.2% | 18.9% |
| Since Launch (annualised) | 3.7% | 3.0% | 0.7% |
| Latest 10 years (annualised) | 0.8% | 3.5% | (2.7)% |
| Latest 5 years (annualised) | 0.7% | 3.9% | (3.2)% |
| Latest 3 years (annualised) | (5.9)% | (1.4)% | (4.5)% |
| Latest 1 year | 27.7% | 25.3% | 2.4% |
| Year to date | 12.5% | 11.7% | 0.8% |
| Latest 3 months | 8.0% | 3.6% | 4.4% |
| Latest 6 months | 6.3% | 8.6% | (2.3)% |
| Month | (3.3)% | (4.4)% | 1.1% |
* MSCI Emerging Markets Total Return (net) Index (Bloomberg ticker: NDUEEGF)
The performance shown is net of fees. The “net” return series consists of a composite weighted average of actual net returns for USD denominated portfolios (both pooled and segregated). The highest fee paying class is used where the performance of pooled vehicles are included in the composite. Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. The volatility of the MSCI Daily TR Net Emerging Markets USD (NDUEEGF Index) represented above may be materially different from that of the Global Emerging Markets Equity Strategy. In addition, the holdings in the accounts comprising the Strategy may differ significantly from the securities or components that comprise the MSCI Daily TR Net Emerging Markets USD (NDUEEGF Index). The MSCI Daily TR Net Emerging Markets USD (NDUEEGF Index) has not been selected to represent an appropriate benchmark to compare the Global Emerging Markets Equity Strategy's performance, but rather is disclosed to allow for comparison of the Strategy's performance to that of a well-known and widely recognized index.
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