Emerging markets, may include frontier markets
Risk-free rate + Premium
We expect emerging markets to continue to outperform most developed markets in the long run due to converging forces in income levels, living standards, social benefits, interest rates, and general economic opportunities. Because of market inefficiencies, we believe emerging and frontier markets present ample mis-priced assets.
To seek long term capital appreciation through investments in larger capitalization stocks listed in emerging and, to some extent, frontier markets, while controlling the strategy’s volatility with systematic short positions in equity and equity derivatives, and occasional positions in fixed income and other asset classes.
The strategy is actively managed through a bottom‐up selection of undervalued stocks with high growth potential as determined by assessing business strategies, management teams and fundamental measures, combined with a four-pronged macroeconomic analysis of political environment, economic tendencies, long-term valuations and market sentiment. In addition, our macroeconomic analysis provides a systematic component to reduce overall volatility by limiting net market exposure through short equity positions, equity derivatives, and occasional positions in fixed income and other asset classes.