Emerging Markets Discovery Equity Fund

Investment involves risk. Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy.

Strategy

Fund Summary

Actively managed and invests mainly in a widely diversified portfolio of shares of emerging market companies.

Risks

The following risks are materially relevant to the fund. Please click here to view the definitions of the risks listed below.

Country risk – China
Country risk – Russia and Ukraine
Currency
Emerging markets
Equities
ESG
Geographic concentration
Investment fund
Management
Market
Operational
Small/mid cap
Stock Connect
Style

Typical Investor

Designed for Investors who plan to invest for the medium to long term.

The Sub-Fund may appeal to investors who:

are interested in investment growth
are looking to diversify their equity investments, in particular existing investments in developed markets
understand and can accept the risks of the fund, including the risks of investing in emerging markets

30-Jun-2022 - Ernest Yeung, Portfolio Manager,

KE Holdings is one of China's largest property brokerage platforms. We bought more shares in the company as we feel it will gain market share due to its strong network and margin improvement as property sector activity recovers.
We bought shares in Brazilian mall developer Multiplan Empreendimentos, which we feel will see strong rental growth momentum as tenant sales gather pace. It has a healthy cash position, stable occupancy levels and good cost control, in our view.
We bought shares in South Korean food company CJ Cheiljedang as we believe the company's shares will perform well in an inflationary environment.
Tingyi Holding is a leading food company in China. We purchased shares in the company as we believe its margins will improve as the current environment of commodity inflation will likely fade and following the launch of new premium products.
We purchased shares in Weichai Power, a leading diesel and truck engine manufacturer in China. We believe the company stands to benefit from increasing capital expenditure in China as well as from relatively loose monetary conditions.
China Oilfield Services is one of the largest Chinese oil services companies. We bought shares in the company as we believe its future prospects are levered to the increase in oil and gas capital expenditures internationally.� ��
We increased our holding in Alibaba Group as we think that the market valuation of this e-commerce giant has priced in a pessimistic scenario. We see the stock benefiting from cost savings, a cyclical rebound, and improved capital allocation.
Ping An Insurance is one of the largest insurers in China. The environment has been challenging for the company amid lockdowns in major cities; we sold shares in the company as we believe we can find better opportunities elsewhere in the sector.
We sold shares of Brazilian bank Banco Bradesco as we believe it is more exposed to disruption and competition than its peers.
We acquired shares of Yangzijiang Financial as a result of the spin-off from Yangzijiang Shipbuilding. The company's principal businesses are debt investment and investment management.

30-Jun-2022 - Ernest Yeung, Portfolio Manager,

Shares of KE Holdings rose after the company undertook a dual listing of its shares and began trading on the Hong Kong stock exchange. We like this stock on the thesis that the property sector will recover and that its home decoration business will drive future incremental growth.
Tsingtao Brewery, one of the largest breweries in China, reported in-line earnings for the first quarter despite the omicron outbreak which had resulted in strict lockdowns in several large cities. We continue to like this stock because of its low valuations and with investors underappreciating the significant progress in its premium portfolio, product momentum driven by growing interest in domestic brands, and a more commercial organization spurred by the stock incentive plan. In our view, an improved industry structure also provides a favorable backdrop for earnings growth.
Tongcheng Travel Holdings reported better-than-expected first-quarter results and the shares rose. We believe the company, one of the biggest online travel agencies in China, will benefit from easing of the lockdown restrictions as it derives almost all its revenues from domestic travel. We think the company will post fast growth as it is in a strong position to capture the rapid growing travel demand of users in lower-tier cities.
Shares in Petronet LNG, one of the largest LNG (liquified natural gas) importers in India, climbed after it reported strong earnings during the quarter. We continue to like the stock due to its attractive valuations even after pessimistic assumptions regarding tariffs and utilization.
Ambuja Cement shares rose after the Indian conglomerate Adani Group's plans to acquire Switzerland-based Holcim's majority stake in the company triggered an open offer requirement for the rest of the company's shares.
Shares of Hon Hai Precision, one of the world's largest electronics goods manufacturers, rose after it posted a multi-year high net income in the first quarter, gaining market share from its rivals. Despite the deteriorating global macroeconomic environment, company management remained upbeat, focusing on market share gains and surging demand in various computing and cloud devices.
Bizlink Holding performed strongly after its earnings rose sharply. This cable manufacturer has potential upside from its auto and health care business, in our view.
Singapore automobile distributor Jardine Cycle & Carriage added value after it reported strong earnings during the quarter. The improvement was driven primarily by the domestic economic recovery and higher commodity prices. The company benefited from luxury sales tax incentives, and the agribusiness division recorded higher crude palm oil prices.�
Exposure to China's Yangzijiang Shipbuilding, one of the biggest shipbuilders in the world, added value as we believe there is renewed investment interest and reliance on energy internationally. In our view, this stock is a value and late cycle play on the recovery in global shipping demand. We anticipate that a demand upcycle for ship orders will be met with a disciplined supply response after a decade-long bear market for the shipbuilding industry.
Shares of OTP, Hungary's leading bank and the dominant retail franchise in the country, fell due to its business in and exposure to Russia and Ukraine. We are confident the bank is sufficiently capitalized to absorb the losses from its Russian operations and believe there is little balance sheet risk involved. We think future return ratios are likely to rebound supported by higher interest rates and the integration of a Slovenian acquisition.

Disclosure on Vendor Indices can be found here.