The Columbia Emerging Markets Opportunity team utilizes a disciplined investment process that combines top-down and bottom-up analysis. The team believes that a combined approach yields a more comprehensive understanding of factors that drive performance, as well as an understanding of the macroeconomic backdrop for company-specific stories.
The investment universe is comprised of emerging markets stocks in and outside MSCI emerging markets index and includes developed- and frontier-market companies with growth potential tied to emerging markets. The portfolio managers seek “stewards of capital” — companies which they believe are best positioned to capitalize on under-penetration and realize significant growth. The team employs fundamental screens as well as proprietary quantitative screens in its research. Fundamental research considers company, sector, and country factors while quantitative research considers valuation, earnings quality and price & earnings momentum. Sector and country allocations are based on economic/market outlook and valuation. Typically, sector and country ranges are +/- 1,500 basis points active weight for both.
The portfolio is composed of 70-90 names. Target positions are a maximum or minimum of +/- 500 basis points versus the benchmark. The team incorporates its currency outlook during the country allocation process. When the currency outlook differs from the country allocation (i.e. bullish currency but underweight country or vice versa) the team looks to hedge this exposure versus the benchmark.
Benchmark: MSCI Emerging Markets Index
Portfolio parameters are internal guidelines used by the investment team and are subject to change without notice. Formal investment parameters are set forth in the offering documents or investment management agreement.