Proper country allocation regulates risk
EMM’s country allocation is top-down. We combine the output from our quantitative country allocation model with the qualitative judgment of our Chief Investment Officer to make country allocation decisions.

EMM’s proprietary, quantitative model suggests country targets based on divergences between the expected return of an individual country’s equity index and the expected return of a selected universe or benchmark. The model integrates multiple economic and market factors, including long-term expected corporate cash flows, real interest rates, and currency competitiveness. We then enhance the model’s suggestions with our own judgment on factors that cannot be modeled, such as expected structural changes and interest rate momentum, to derive a final country allocation.

Stock selection can enhance performance
Stock selection is principally bottom-up and based on identifying fundamental value. We focus on fundamentals and avoid market fads. At EMM, we don’t just “pick” stocks; experienced analysts and portfolio managers make informed stock selection decisions based on our first-hand knowledge of companies and industries. Investment professionals travel throughout the emerging markets to visit and scrutinize the companies and industries in which we invest. To quantify views, we carefully maintain an in-house database of economic and corporate information that covers roughly 1,000 companies.

Diversification lowers risk
Our goal is to add value through a series of careful country and stock bets in over 50 countries.

Inefficiency provides opportunity
We seek investment opportunities ahead of the “herd.” While other managers limit their investment universe, we also search for opportunity in smaller stocks and in non-index, frontier markets.