The company says investors only have six UK domiciled Latin America funds to choose from, so more choice is needed. Its new offering is managed by emerging markets specialist Jeff Casson, who joined Martin Currie from Swip in September along with several other members of his team at Swip. He has 10 years investment experience in emerging markets and will be supported by investment director Alastair Reynalds. Martin Currie’s global emerging markets team and global sector research teams will also have input in the concentrated portfolio of 35 to 55 stocks. The portfolio will be unconstrained in terms of country and sector weightings.
When selecting stocks, Casson and the team start from the premise that cash earnings are the long-term driver of share prices. They believe that understanding how companies generate their eanings and forecasting how these will grow over the long term should enable them to identify the value in each company.
The team take a bottom-up approach to find the best stock ideas, meet companies and take corporate governance issues in to account. They discuss the strengths and weaknesses of each idea and the portfolio is constructed from stocks that have the most growth potential over the next 18 months to three years. The initial weighting of a stock will be 1 to 2 per cent and any holding that falls below 1 per cent will be reviewed then topped up or sold.
Martin Currie highlights the range of languages spoken by its global emerging markets team as an advantage as the ability to communicate with company management at all levels provides useful insights into the culture and other aspects of countries.
Company valuations and earnings prospects are attractive in Latin America in Martin Currie’s view. It says performance has been strong due to global growth, rising commodity prices and other factors such as economic policy and regulation, while inflation and interest rates have fallen since the mid 1990s.
This fund can provide targeted exposure to these particular emerging markets as opposed to global emerging markets funds. Casson’s track record at Swip may provide a comfort factor to some IFAs but others may prefer to gain exposure to regions such as Brazil through Bric or global emerging markets funds.