Syme and Wimborne joined from Baring Asset Management earlier this year. Syme was head of global emerging market equities at Barings while Wimborne was a fund manager.
The launch follows JOHCM’s Emerging Markets Fund, managed by Emery Brewer and Ivo Kovachev and brought to market in April last year. Syme says the GEM Opportunities Fund will differ not just through its top-down strategy but also through its more concentrated approach – it will hold between 50 and 60 stocks – and its focus on blue chip companies.
“We’re looking to buy blue chip quality names that are the best way to get exposure to these strong top down themes we’re seeing”, says Syme.
The investment process will focus on country allocation across all 21 constituents of the MSCI Emerging Markets Index. Syme and Wimborne put together an allocation for each country having looked at its growth,liquidity, currency, management/politics and a valuation of its equity market.
“We have come to believe that emerging markets go right or wrong at a country level. We’re looking to drive about half the outperformance through country allocation. Every stock we buy will have a top-down view as well”.
Country allocation
“It’s going to be a portfolio with some big overweights and underweights”, the manager adds. “Two markets we favour at the moment are China and India”, he says. Syme believes Chinese and Indian stocks are pricing in more bad news than may materialise, and notes they have been particularly unloved by the market this far this year.
He acknowledges there is “more evidence of policy success in China than in India” but sees opportunities in state-owned Chinese and Indian banks as well as Chinese hygiene goods supplier Hengang.
Syme is also interested in the Association of South East Asian Nations (ASEAN) story – particularly Thailand, Indonesia and Malaysia – and highlights the interesting construction/infrastructure stories that can be found in the latter two nations.
By contrast, he is “more cautious on some of the cyclical markets”, including the commodity-driven Brazilian and Russian economies and the likes of Korea, which has benefitted from export strength in machinery and other areas.
The GEM Opportunities strategy will be available as part of the firm’s Dublin fund range. It will have dollar, sterling and euro share classes, is open to retail and institutional investors, and will be capped at $3bn.
