All our products are managed based on our global Emerging Market process. Our individual strategies incorporate our quantitative top down country allocation analysis (asset allocation), at varying degrees; with fundamental stock research being the primary driver of portfolio returns.

The majority of stock research (~70%) is conducted in-house, supplemented by select research from other independent sources, who we know and trust. Team members are responsible for the analysis of stocks within individual countries in the three main regions of Asia, Latin America and EMEA. We believe country allocation is an important decision in emerging markets; therefore analysts have country, not sector, responsibilities.

Stock investment decisions are based on comprehensive bottom-up company analysis, where we believe in gaining a full understanding of a company's business model and meeting the management before making an investment in the stock.

Analysts use industry-standard techniques and metrics to assess potential investments, however we do not impose a house style on how various securities should be valued. Due to the nature of companies within our asset class, we encourage analysts to apply valuation techniques most appropriate for the type of company and the market it is in.

Our quantitative model analyses a specific combination of different market and economic factors to generate rankings for each country in its universe. Our model ranks all 21 countries in the MSCI Emerging Markets Index, in order of attractiveness according to a weighted factor score. The countries ranked in the bottom half of the universe are held underweight. These aggregate under weights are redistributed evenly across the countries in the top half of the universe with the highest rankings.

Our stock research effort focuses heavily on fundamental analysis, with the team conducting detailed systematic research of companies from a bottom up perspective. We aim to visit each company rated by our analysts at least once a year, whilst ensuring this is the minimum for all companies held within our portfolios.

After visiting companies, the information gathered is evaluated and analysts conduct a full ratio analysis to determine a fair valuation. Rankings are then assigned to individual companies after analysts determine a fair valuation:

Buy - will outperform country index >10% on a twelve month view
Hold - will move in line with country index on a twelve month view
Sell - will under perform country index >10% on a twelve month view

The final stage of our process is for the Global Portfolio Managers to construct portfolios to the agreed country target weights, as derived from our country allocation model. The portfolio managers are jointly responsible for all global mandates. Each manager is assigned a number of countries, and they are responsible for building these country elements in each and all of our global emerging markets mandates.
Our regional and thematic funds utilise our country asset allocation model to varying degrees.

Portfolio risk, as measured by tracking error, is monitored at a stock, country and portfolio level, and stop loss and other risk monitoring measures are incorporated into the investment process. Individual portfolio constraints are built into our front office portfolio management system. Management of risk is a combined effort between the investment team and Compliance through constant oversight and regular monitoring.