Emerging Markets Equity Commentary | Q2 2019

Quarterly Letter

The Perterra Emerging Markets Fund, LP declined 0.8% in the second quarter, compared to the +0.6% return by the MSCI Emerging Market Index in U.S. dollars.  This virtually flat performance of the index came despite the uncertainty caused by the escalating trade war between the U.S. and China, general elections in India and Indonesia, and the passage of a critical social security reform bill pending in Brazil.  This uncertainty exacerbated the fact that the global economy appears to be entering a period of decelerating growth and synchronized policy easing. The portfolio continues to be positioned very differently than the broader market, including an 8% overweight to the financial sector, a 10% underweight to China, and increasing exposure to other parts of Asia, where compelling value has been emerging.