Emerging Markets Equity

Coronation is a long-term, valuation-driven investment house. Our investment philosophy is deeply engrained in our culture and we apply exactly the same research process when investing in emerging markets as we have done in South Africa for the past 20 years. Our experience in an emerging market has provided us with an excellent training ground for disciplined bottom-up investing in highly volatile macro-economic environments.

We are active, bottom-up stock pickers with a disciplined approach to constructing portfolios based on our assessment of company fair values. We do all our own proprietary research and modelling.

We believe emerging markets offer a valuable long-term investment opportunity as these economies and companies gain global prominence. An increasing number of emerging market companies are well-run with greater transparency, and now offer access to areas of global economic growth.

Valuation is the single most important factor we consider when selecting shares for investment. In order to arrive at our coverage list (the shares we research in detail), we narrow the potential investable universe down to companies which we feel warrant more investigation. These are companies which we believe are average or above-average businesses relative to the market. Our investable universe also includes global developed market companies which generate at least 40% of their revenue or free cash flow from emerging markets.

The portfolios are managed on a clean-slate basis. As such, we do not use indices as a starting point for building a strategy, preferring to rely on valuation discipline and diversification. Our emphasis is on stock selection rather than top-down geographic allocation or macro themes. We are comfortable taking decisive positions away from the benchmark, as these positions are underpinned by convictions derived from our proprietary analysis. Our Global Emerging Markets strategies typically hold 50 to 70 stocks of our best investment views and will be fairly concentrated in nature.

The global emerging market investment team forms part of the Coronation investment team, which also comprises the South African, emerging markets and frontier markets investment teams. The entire investment team, situated in Coronation’s Cape Town office, operates as an integrated unit, with significant sharing and cross-pollination of investment ideas to create a single research platform. The global emerging market investment team leverages off the experience and work done by the other investment professionals in the company.

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Global Emerging Markets

By replicating a philosophy and process perfected over more than two decades, we have built a solid track record of alpha generation in emerging markets globally.

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