9 min read | After considerable volatility throughout the quarter, emerging markets performance took a dramatic positive turn during the last few weeks of September when Chinese leadership announced sweeping measures, both monetary and regulatory, to support the economy and boost capital markets. Whether or not it will ultimately be successful remains to be seen. Two of the other themes we are investigating this quarter can, for different reasons, be filed under the saying “don’t judge a book by its cover” – first, the relationship between return of capital and actual yields, and second, the investment opportunity set in the EM pharma sector.
6 min read | by Robert Silgardo | Earlier this year, I spent two weeks in Southeast Asia to assess investment opportunities, test our investment theses, and deepen our local network across the region. I came away excited about Vietnam and with cautious optimism about opportunities in China. Meanwhile, some questions remain regarding Thailand’s future.
8 min read | Market exuberance related to technology innovation, and most recently AI, has driven a handful of developed market stocks to dominate global indices for years, and EM is not immune from the effects. The IT sector has contributed dramatically to the overall narrow leadership found in emerging markets; the sector’s weight within the index reached new peaks this quarter. We believe that embedded expectations for many tech companies are excessive, driving us to look for underappreciated and contrarian opportunities elsewhere. Simultaneously, a busy global electoral calendar introduces a higher likelihood of market volatility, creating a landscape ripe for identifying new investments at attractive valuations.
9 min read | by Alice Popescu | It is easy to develop an unappealing top-down picture of the South African investment landscape. Challenges related to unemployment, chronic inflation, economic growth, government debt, corruption, and more have turned away many foreign investors. So why, then, did we travel halfway around the world in search of high-quality companies to add to our investment portfolio? Four main themes emerged from my recent trip to South Africa, which underscore many of our holdings’ investment theses and our overall enthusiasm about the region’s future: 1) encouraging infrastructure trends, 2) sustainable developments in renewable energy, 3) early adoption of technology, and 4) strategic positioning as an African/frontier portal.
9 min read | Our three-year anniversary led us to reflect on what has changed in equity markets since April 2021 and, importantly, where we might be headed. The technology sector continues to make headlines across global markets, contributing 2.3% of the MSCI EM Index’s 2.4% return (in USD) in the first quarter. Not a dinner or meeting seems to pass without mention of the most dominant trend du jour – artificial intelligence. We agree with consensus that tectonic shifts are underway, and a broad range of industries – from financials to health care to industrials – will see substantial benefits. But we also believe that an important element of how this will all unfold, and the breadth of companies poised to benefit, is widely underappreciated.
6 min read | Women are making a difference in emerging markets, both from a societal and investment perspective. In honor of International Women’s Day, Portfolio Manager Alice Popescu has explored the impact that women are having across the policy, regulatory, and corporate landscapes. With our Emerging Markets Opportunities portfolio approaching its three-year anniversary later this month, key differentiators and drivers of performance are top of mind. The success of many of our individual investments has been influenced by women leaders.
Portfolio Manager Alice Popescu shares her perspectives on emerging markets, focusing on five key themes (pertaining to de-coupling, China, India, capital returns, and frontier markets) and associated risks.
10 min read | After a strong 2022, we expected that emerging and frontier markets would avoid an economic hangover, and this proved to be true. Both EM and frontier countries demonstrated stronger absolute and relative economic performance, paired with moderating inflation, active and early central bank policymaking, and relatively stable currencies. China was the primary disappointment, as its post-pandemic re-opening led to flatter-than-expected domestic activity and failed to reverberate through many countries in Southeast Asia. Meanwhile, internal consumption across EM was broadly resilient, and the trend of emerging markets de-coupling from developed markets continued.
Portfolio Manager Alice Popescu provides a two-minute summary of her Q3 2023 emerging markets investment commentary, including her contrarian perspectives on China.
7 min read | The Altrinsic Emerging Markets Opportunities portfolio declined 2.4% (-2.6% net) compared to the 2.9% decline of the MSCI Emerging Markets Index, as measured in US dollars. Performance throughout the period varied markedly within emerging market, with a stark divergence between EMEA and Latin America. Performance across the market capitalization spectrum also varied, with small and mid-cap EM stocks substantially outperforming the broad EM index. Overall, EM equities outperformed developed markets in the third quarter.
