A new global emerging markets equity fund has been launched by Maple-Brown Abbott which, according to the investment manager, will provide investors with the opportunity to gain exposure to some of the largest and fastest growing economies around the world.
The Maple-Brown Abbott global emerging markets equity fund invests in companies across global emerging and frontier markets and is managed on a “benchmark unaware” basis.
Maple-Brown Abbott said that the actively managed fund provides exposure to a concentrated portfolio of companies that are most likely to benefit from cyclical and structural change.
The fund typically holds between 30 and 40 stocks and seeks to outperform the MSCI Emerging Markets Net Index (AUD) after fees over a five-year investment period.
It will be managed by Maple-Brown Abbott’s head of global emerging markets John Moorhead, who said that the fund may be appropriate for investors seeking capital growth with an investment horizon of at least five years who also have a very high risk tolerance and are comfortable with the risks associated with investing in global emerging markets.
“Emerging market companies provide investors with a unique opportunity to access long-term trends including growing middle-class consumption, evolving demographics, and the energy transition,” commented Mr Moorhead.
“Given the wide range in companies, valuations, and macroeconomic factors, we believe that active management (that is, active stock picking) is crucial when investing in global emerging markets.”
Mr Moorhead explained that the core belief underlying the new fund’s investment strategy is the need to focus on both structural and cyclical change as being the driver of cash flow, valuations, and ultimately longer-term share price returns.
“By placing change at the core of our philosophy, we seek to better identify and understand these shifts and how they will play out over our multi-year investment horizon,” he said.
“We believe the ideas capable of having the biggest impact are found at the intersection of our focus on change, our bottom-up, in-house industry research, and our proprietary screen.”
According to Maple-Brown Abbott chief executive officer and managing director Sophia Rahmani, emerging markets now represent close to half of global GDP, but their equity markets only remain a fraction of the size of those in the developed world.
“After the longest bear market since their inception, emerging markets today appear to be offering an abundance of compelling investment opportunities,” she said.
“Company management teams and business models have been stress-tested in recent years, with many coming through in stronger operating positions, and at attractive valuations.”
While acknowledging that the global emerging market equity strategy is relatively new for Maple-Brown Abbott, Ms Rahmani highlighted the depth and diversity of investment experience in the firm’s Asia and emerging markets team, including Mr Moorhead.
“We believe having someone of John’s calibre managing the strategy and our multicultural and multilingual investment team being based together in Sydney gives us an advantage,” Ms Rahmani concluded.
Jon Bragg
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.
