Chris Brookman, Macquarie; Justin Tay, Zenith. Photo: Matt Fatches
Category: International equities – emerging markets and regional
Winner: Macquarie Professional Series/Walter Scott & Partners
Analyst: Justin Tay
Sector overview:
Emerging Markets have bounced back during calendar year 2016 after a number of years of underperformance relative to Developed Markets. Stabilisation within the Chinese economy, a weaker US dollar, diversification away from developed-market-driven volatility and relatively attractive valuations served as catalysts for the recovery. Divergence in performance between the underlying emerging market economies continues to be high, providing opportunities for active managers to add value.
Zenith says…
The Walter Scott Emerging Markets Fund, distributed via the Macquarie Professional Series, offers investors a growth orientated exposure to a relatively concentrated, benchmark-unaware portfolio of emerging markets equities. Walter Scott employs bottom-up, fundamental research to target companies with high rates of internal wealth generation. Consequently, Walter Scott focuses on quality companies with outstanding long-term growth prospects that are structurally dynamic, enabling them to generate sustainable wealth through all market cycles. The strong performance of the fund has been driven by the investment in higher quality companies which have found favour within the context of broader market volatility.
Interview
Chris Brookman
Division director
Macquarie Professional Series/Walter Scott
[This award] acknowledges Walter Scott’s long history of managing emerging markets. They’ve been managing emerging markets for more than 19 years – international equities as a category since 1983 – and it recognises the very strong investment culture within Walter Scott and the fact that they’ve been consistently applying their long-term, conservative, bottom-up approach to investment. Anything that happens with Walter Scott is going to be a product of their bottom-up stock picking. It’s not going to be about regions or sectors, necessarily; it’s going to be about the individual companies they are investing in. And those companies typically are companies that exhibit 20 per cent growth – that’s the target that Walter Scott goes for – and they are typically fairly conservative companies with low levels of debt on their balance sheet, but capable of very strong growth. They are usually category killers, in that they will dominate the industry that they are in, and have very high barriers to entry to competitors to destabilise them. Walter Scott was the second manager in the Professional series and we went through a process of meeting many, many managers globally when we started the business, and Walter Scott really stood out as a manager that we though would bring a lot to the Australian market. The emerging markets capability specifically was the second Walter Scott capability that we brought to market.
