J O Hambro Capital Management (JOHCM) has launched the JOHCM Emerging Markets fund, giving UK investors access to a strategy its three-person team has run for the firm’s institutional clients since 2010.
The Irish-domiciled UCITS fund is managed by Emery Brewer, Ladislav Sabo and Dalibor Kováč, who currently manage $1.2bn in emerging market equities. Brewer has more than 30 years in the industry and has run the strategy for more than 25 years, including at his previous firm, Driehaus Capital Management. Sabo and Kováč have 16 and 11 years of experience respectively.
JOHCM Emerging Markets uses a high-conviction, all-cap approach and is not tied to its MSCI Emerging Markets benchmark. Brewer’s team splits its picks into two types of growth: secular growth companies with strong and sustainable long-term potential, and recovery growth companies with improving earnings momentum that is not yet reflected in their valuations.
The team invests in businesses with improving growth and strong fundamentals, using three independent signals (news flow, earnings and price momentum) to find them. It also screens for accounting and governance risk throughout the life of each holding.
Brewer, lead senior fund manager at JOHCM, said: “After more than a decade overshadowed by US equities, emerging markets are drawing investors back. But the index is a blunt way to capture them: ownership has narrowed to a handful of large companies and markets, and the best opportunities increasingly sit outside it, in businesses most investors never look at. That is where we invest.
“Emerging markets move quickly, so what counts is spotting the turn early, acting on it and selling without sentiment when the case fades. The UCITS structure brings that process to far more investors.”
The I class has an ongoing charges figure (OCF) of 1.10% and a minimum investment of £1,000, while the F class charges 0.55% with a minimum of £5,000. The fund is classified as Article 8 under the EU Sustainable Finance Disclosure Regulation, the category for funds that promote environmental or social characteristics.
It will invest at least 80% of its net assets in emerging market equities and equity-related instruments and aims to outperform the index, with net dividends reinvested, over a five-to-seven-year period.