Strengthening fundamentals, improving economic growth and structural reforms are helping to establish emerging market equities as a mainstream asset class.
We believe that emerging markets offer exciting long-term growth prospects at an attractive price, as the strengthening economic fundamentals are not yet fully reflected in equity market valuations. However, emerging market stocks are not immune from short-term shocks and macro-economic uncertainty – a highly-selective approach is vital, in our view.
LO Funds-Emerging High Conviction is focused on selecting high-quality companies with sustainable business models – firms that we believe are well-positioned to withstand sector rotations and geopolitical threats. We believe that companies generating a return on capital in excess of their cost of capital can outperform over the long term. We favour companies within domestic-focused sectors which are poised to directly benefit from the cyclical recovery taking place within emerging markets.
We believe that emerging market equities currently present a long-term value opportunity but that investors must carefully consider what investment approach is most appropriate to capture it.
Lead Portfolio Manager
Client Portfolio Manager