MSCI Emerging Markets Index
Performance Start Date
The Emerging Markets team invests in sound businesses that we believe are mispriced by the market and can generate positive and sustainable earnings growth, thus enabling them to achieve economic profits over time.
The Emerging Markets Focused Equity investment process employs a fundamental, bottom-up approach:
Initial Filters: The process begins with an investment universe of 27 emerging countries. The entire universe has more than 5,000 listed stocks. Initial screens require companies to meet the following criteria: a market capitalization of US$1.5 billion or greater, a US$7.0 million daily average trading value (most recent 100 days) and a Cash Flow Return on Investment (CFROI) greater than or equal to 10%. From this point, approximately 365 companies are identified for further analysis.
Fundamental Analysis: Each analyst reviews the companies in their assigned sector, filtering for sector-specific constraints and assessing what we believe are the best candidates for the portfolio based on their franchise value, competitive advantage and investment profile. From the sector review, approximately 100 companies will be included in the Priority List that will undergo further in-depth fundamental analysis in three stages: quantitative analysis, financial analysis and determining the fair value of the company.
Portfolio Construction: Portfolios are constructed primarily based on a bottom-up approach. A range of 50-70 securities helps attain broad diversification of the strategy.