"Recent investor outflows are a sign that speculative capital is leaving the asset class and the unrest in the Middle East has also introduced a new, significant risk [to emerging markets]," said O’Hare, who heads up Lazard Developing Markets.
"On balance, at the current, reasonable valuations, we believe those with long-term objectives should maintain an exposure to this asset class, especially in more conservative strategies."
O’Hare says near-term headwinds mean he’s less optimistic than he has previously been for some banks, and so he has cut exposure in this sector.
"Emerging markets have seen a number of interest rate hikes, reserve requirement increases and increasing political interference in day-to-day operations in the banking and other financial sectors," he continued.
The fund’s largest exposure relative to the MSCI Emerging Markets Index is Russia, a country the manager says is inexpensive even when accounting for the high levels of political risk associated with investing there. He favours a bottom-up approach.
The fund is also overweight information technology, a sector where O’Hare says earnings are growing strongly, but his biggest sector position is in consumer discretionary.
Talking on the current weakness of emerging markets, O’Hare says the downward market movements are cyclical and believes this will present a number of potential buying opportunities.
"The price-to-earnings discount of emerging markets to developed markets has become more favourable over the past few months due to the underperformance of the former," he added.
"The current valuation discount results in our continued belief that the asset class offers attractive value over the long-term."
Performance of fund vs sector over 6-months
Source: Financial Express Analytics
Financial Express data shows the fund has returned 7.2 per cent since its launch six months ago, and performed in line with the IMA Global Emerging Markets sector.