Hermes Global Emerging Markets Fund Class F GBP Accumulating
Rated Fund 2016-19. Backs winners of structural change
This fund was highly commended in Money Observer’s Best Global Emerging Markets Fund category in 2016 and clinched the crown in 2018. Although it suffered more than wider emerging markets in 2018, it has outperformed strongly over three, five and 10-year periods.
The £2.8 billion fund has been managed by Gary Greenberg since 2011 with Kunjal Gala becoming his deputy in 2016.
Greenberg’s approach is to try to identify the winners of structural change in emerging economies. He aims to select high-quality companies with strong capital discipline and highly competent managements that he believes will weather market storms and reward investors over the long term.
His first step is to look at macroeconomic factors in order to identify attractive countries and sectors in which to invest. Having identified those where they believe conditions are supportive for growth, Greenberg looks for the companies he wants to invest in, focusing on quality companies trading at attractive valuations. Because of the volatility of emerging markets, he stresses that it is important to buy shares at a discount so that there is a margin of safety.
During the investment process, the universe of potential investments is filtered down, and individual companies are researched via extensive company meetings and analysis. Environmental, social and governance factors are also considered. Greenberg sees these as an important part of maximising shareholder returns and generating sustainable returns over the long term, particularly in emerging markets. The final portfolio consists of 50 companies from across the size spectrum.
At a sector level, there is a strong bias towards information technology, financials and consumer discretionary stocks, all of which reflect an overweight position relative to the benchmark.
Narrative and ratings content all as of January 2019.See all Money Observer rated funds
|Tencent Holdings Ltd||7.01 %|
|Taiwan Semiconductor Manufacturing Co Ltd ADR||6.23 %|
|Samsung Electronics Co Ltd||5.74 %|
|Alibaba Group Holding Ltd ADR||4.63 %|
|KB Financial Group Inc||2.99 %|
|ICICI Bank Ltd||2.88 %|
|Techtronic Industries Co Ltd||2.67 %|
|AIA Group Ltd||2.58 %|
|Itau Unibanco Holding SA Participating Preferred||2.38 %|
|Sberbank of Russia PJSC ADR||2.26 %|
|Asia - Emerging||38.37 %|
|Asia - Developed||30.75 %|
|Latin America||16.14 %|
|Financial Services||28.92 %|
|Consumer Cyclical||18.05 %|
Gary Greenberg joined Hermes Fund Managers in September 2010 in the Emerging Markets team. Previous to this, he was Managing Partner at Silkstone Capital and Muse Capital, both London based hedge funds he co-founded and managed in 2007 and 2002, respectively. From 1999 through 2002 he was at Goldman Sachs in New York and London, where he co-headed the Emerging Markets product for GSAM, and served on the global asset allocation and European stock selection committees. From 1998 to 1999 he was Managing Director at Van Eck Global in Hong Kong and New York, where he was the lead portfolio manager for International Equities and ran the Hong Kong Office. From 1994 through 1998 Gary was Chief Investment Officer at Peregrine Asset Management in Hong Kong, managing and supervising global and regional equity, plus fixed income funds. In the early years of his career he was a Principal of Wanger Asset Management in Chicago.
Data provided by Morningstar.
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