A World Map

Emerging Markets Strategies

The Parametric Emerging Markets strategy sits within our Systematic Alpha (rules-based) suite of offerings. Parametric’s investment philosophy is based on mathematical principles of diversification, compounded growth, and volatility capture. 


The strategy addresses known problems with a naïve, market-capitalisation weighted exposure to emerging markets. It seeks to add value through portfolio construction and rebalancing among individual countries, while maintaining the diversifying characteristics of this appealing asset class. We re-weight the portfolio to reduce concentration risk and dynamically rebalance through time to reinforce diversification. Our rebalancing techniques seek to enhance potential returns while minimising implementation frictions. 


Since 1994, this strategy has maintained broad diversification across emerging and frontier markets, designed to efficiently capture the long-term returns of developing countries’ equity markets while reducing portfolio volatility.


We provide two variations of our Emerging Markets strategy – one focusing primarily on 24 emerging markets countries, while the other incorporates a wider universe of developing countries, including more than 51 emerging and frontier market countries.


 

Emerging Markets Core

Emerging Markets

Countries:

Primarily MSCI-EM

MSCI-EM + Frontier

Inception:

2011

1994

Benchmark:

MSCI EM Index (Net Div)

MSCI EM Index (Net Div)

Target Excess Return:

3% over a market cycle (3-5 years)

3% over a market cycle (3-5 years)

Expected Tracking Error:

2.5% - 4.5%

3.5% - 5.5%

Expected Volatility:

90-100% of index

85-95% of index

Expected Annual Turnover:

5-15%

5-15%

Number of Stocks:

~700 – 1,100

~1,000 – 2,000


The above information is for illustrative purposes only and does not constitute investment advice or a recommendation to adopt any particular investment strategy. This information provides a general example of the implementation of the respective target strategy models. This information is for modeling purposes only as of the date hereof, may change at any time without notice, and does not represent the experience of any particular client. Actual client portfolio characteristics and performance will vary. It is not possible to directly invest in an index. All investments are subject to loss.
Hands holding a mobile phone
Get in Touch
Contact our Australia Representatives
Hands holding a mobile phone
Get in Touch

Connect with our team on this strategy

{F33BD959-1499-4857-91FB-3B0EF4ADCB43}

Loading...