7 min read | We continue to view the ASEAN region as one of the best sources of investment opportunity in emerging markets, presenting a unique combination of attractive valuations, recovery potential, and sustainable long-term growth. Within the region, and considering both short- and long-term potential, we believe Vietnam is one of the most promising investment plays, unfolding in five acts. Alice Popescu, Portfolio Manager, has written a synopsis of the play, building a case for investors to embrace the opportunity in Vietnam.
5 min read | by Alice Popescu | I recently returned from my first post-pandemic due diligence trip to Mexico. While virtual meeting platforms proved to be a blessing during travel lockdowns, nothing compares to the insights gained and relationships that can be developed during a quality research trip. Travelling across three major economic zones and two time zones, I visited with 15 companies, public and private, as well as a vast array of policymakers and political observers. Broadly speaking, the infrastructure improvements, economic environment, services industry recovery, and opportunities linked to an overarching trend of “nearshoring” were impressive.
3 min read | At Altrinsic Global Advisors, our emerging markets equity strategy is managed with a bottom-up, fundamentals-driven approach and an objective to identify high quality, underappreciated investment opportunities across the cap spectrum, truly reflecting the DNA of the EM asset class. Today, as we assess how our differentiated perspectives and exposures played out during the first year of our strategy, we find great alignment with our previous views (which we outlined in the September 2021 white paper report entitled Exploring the True DNA of Emerging Markets).
The Altrinsic Emerging Markets Opportunities portfolio finished the quarter virtually unchanged (+0.1%), outperforming the MSCI Emerging Market Index’s decline of 7.0%, as measured in US dollars. Key contributors to our relative outperformance included our differentiated exposure to energy, financials, and communications services companies, our overweight exposure in key Latin American markets including Brazil, Chile, Mexico, and South Africa, and our significant underweight exposure in Russia and China.
3 min read | Hypersonic weaponry is one of the most disruptive technologies in modern defense. We recognize that this is a controversial, sensitive, and potentially polarizing topic for multiple reasons, especially given the ongoing war in Ukraine. Yet, given the significant resources governments are committing to hypersonic research and innovation, we felt it would be valuable to provide a brief, fact-based review of hypersonic technology, its history, and the potential implications from both geopolitical and industry standpoints. Our sole intent is to provide an educational overview.
Global policy normalization was the key factor driving markets during the fourth quarter. Responses to inflationary pressures have varied, but many emerging markets have been progressive in raising rates. While this weighed on the relative performance of emerging market equities versus global equity markets, it may prove to be prescient. In addition, the more proactive interest rate policies have not gone unnoticed in the currency markets, as the MSCI EM Currency Index remained near its all-time highs.
The Altrinsic Emerging Markets Opportunities portfolio declined by 6.9%, outperforming the 8.1% decline of the MSCI Emerging Markets Index, as measured in US dollars. Positive attribution came from our underweight exposure to China internet and related stocks, our broad overweight in Indian equities, and our differentiated approach to communication services. Significant volatility within emerging markets, driven particularly by its largest market, China, defined the quarter.
12 min read | In this paper, we explore the inherent characteristics of the emerging markets (EM) asset class through an economic lens and discuss the key investment criteria that differentiate emerging markets from developed markets. We also challenge the influence of existing benchmarks, which feature significant concentration problems at both the issuer and country level, on investors’ asset allocation decisions and managers’ security selection.
Emerging market equities trailed developed markets in the second quarter; however, performance varied by individual markets and segments within EM (Chart 1). Regionally, North Asian countries’ mega cap technology stocks came under pressure from sweeping regulations changes, causing weak performance and offsetting strong performance in Latin America and EMEA.
