Emerging Markets Strategy

Strategy Overview

HGI's Emerging Markets Strategy seeks to outperform the MSCI Emerging Markets benchmark by investing in companies that have good fundamental prospects and are undervalued. This Strategy invests principally in equity securities of companies organized or with significant operations in emerging markets and can include investments in small and mid-cap companies. Securities purchased are from ideas generated by the Value Team's bottom-up research efforts. The Strategy does not use derivatives to hedge currency exposure. Cash and cash equivalents are generally less than 5% of the portfolio.

Regional / Sector Allocation

The Strategy's major regions are Asia, Latin America and EMEA (Europe, Middle East and Africa). The Strategy does not have static percentage limits on specific sectors or regions. Rather, stock selection based on bottom-up fundamental research is meant to drive sector and regional allocations. The Team's view of the macroeconomic situation tends to be reflected in the sector and geographic weightings in the portfolio. Thus, exposure to any sector or region will fluctuate depending on the conclusion reached during the course of the Team's fundamental research. However, regional allocation has generally ranged between 0.5x -1.5x the index weight of the 8 major countries in the index and sector allocation between 0.5x - 2x of the index weight.

Portfolio Construction

Portfolios are constructed utilizing a bottom-up process. The Strategy results in a portfolio that typically holds 80-90 securities. The Team's value discipline has typically resulted in a portfolio diversified among companies, regions and sectors, with no single position usually exceeding 5% of the portfolio at time of purchase.

For detailed information sheet and performance history, please click here (PDF)

To view a full performance presentation for this product, please click here (PDF)

To read a Commentary for the Quarter Ending September 30, 2011, please click here (PDF)