Emerging Equity Income

Strategy highlights

: Disciplined approach, which includes buy and sell yield criteria, taking thematic research into consideration

Concentrated portfolio with long-term focus and an emphasis on quality, governance and consistency of dividends

Harnessing time, consistency of process, and the compounding power of dividends with emerging market growth

Stock selection driven by bottom-up proprietary research which is underpinned by our multidimensional approach

Learn more about our multidimensional investment philosophy

Strategy profile

Objective: To achieve income together with long-term capital growth from investing in emerging-market securities
Performance benchmark: MSCI Emerging Markets Index (NDR)*
Typical number of equity holdings: 40 to 60
Yield discipline: Every new holding must have a prospective yield of at least 85% of the yield achieved by the comparative index. Any holding whose prospective yield falls below a 40% discount to the yield achieved by the index will be sold. On account of liquidity, it may not be possible to dispose of an entire holding immediately.
Strategy inception:: October 2012
: * The MSCI Emerging Markets Index (NDR) index is used as a comparator for this strategy. The strategy does not aim to replicate either the composition or the performance of the performance benchmark.

Investment team

The strategy is managed by an experienced team with a wide range of backgrounds. In-house research analysts are at the core of our investment process, and our multidimensional research capabilities help to promote better-informed investment decisions.

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Zoe Kan

Portfolio manager, emerging markets and Asia equities team

Alex Khosla

Portfolio manager, Emerging Markets and Asia Equities team

Fei Chen

Investment analyst

Aditya Shah

Portfolio analyst, Emerging Markets and Asia Equities team

Liliana Castillo Dearth

Head of emerging markets and Asia equities

Your capital may be at risk. The value of investments and the income from them can fall as well as rise and investors may not get back the original amount invested.

Key investment risks

: Objective/performance risk: There is no guarantee that the strategy will achieve its objectives.

Currency risk: This strategy invests in international markets which means it is exposed to changes in currency rates which could affect the value of the strategy.

Geographic concentration risk: The strategy primarily invests in a single market which may have a significant impact on the value of the strategy.

Derivatives risk: Derivatives are highly sensitive to changes in the value of the asset from which their value is derived. A small movement in the value of the underlying asset can cause a large movement in the value of the derivative. This can increase the sizes of losses and gains, causing the value of your investment to fluctuate. When using derivatives, the strategy can lose significantly more than the amount it has invested in derivatives.

Emerging markets risk: Emerging Markets have additional risks due to less-developed market practices.

Concentration risk: A fall in the value of a single investment may have a significant impact on the value of the strategy because it typically invests in a limited number of investments.

Liquidity risk: The strategy may not always find another party willing to purchase an asset that the strategy wants to sell which could impact the strategy’s ability to sell the asset or to sell the asset at its current value.

Shanghai-Hong Kong Stock Connect and/or the Shenzhen-Hong Kong Stock Connect (‘Stock Connect’) risk: The strategy may invest in China A shares through Stock Connect programmes. These may be subject to regulatory changes and quota limitations. An operational constraint such as a suspension in trading could negatively affect the strategy’s ability to achieve its investment objective.

High yield companies risk: Companies with high-dividend rates are at a greater risk of not being able to meet these payments and are more sensitive to interest rate risk.

Counterparty risk: The insolvency of any institutions providing services such as custody of assets or acting as a counterparty to derivatives or other contractual arrangements, may expose the strategy to financial loss.