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.

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The value of investments may go down as well as up, and is therefore not guaranteed. Past performance is not necessarily an indication of future performance.

STRATEGY RETURNS GROSS OF FEES
STRATEGY BENCHMARK* OUTPERFORMANCE
Since Launch (unannualised) 132.7% 70.8% 61.9%
Since Launch (annualised) 5.4% 3.3% 2.1%
Latest 10 years (annualised) 2.5% 4.1% (1.6)%
Latest 5 years (annualised) 2.8% 5.7% (2.9)%
Latest 3 years (annualised) (3.7)% 0.4% (4.1)%
Latest 1 year 27.1% 26.1% 1.0%
Year to date 17.0% 16.9% 0.1%
Month 9.5% 6.7% 2.8%
Latest 6 months 10.7% 14.2% (3.5)%
Latest 3 months 8.9% 8.7% 0.2%

* MSCI Emerging Markets Total Return (net) Index (Bloomberg ticker: NDUEEGF)

The value of investments may go down as well as up, and is therefore not guaranteed. Past performance is not necessarily an indication of future performance.