Helsinki Roundtable considers EM equities, government bonds, dividends
Dividends, EM Equities, and government
bonds were in the discussion that took place at InvestmentEurope’s recent Fund Selector Roundtable Finland.
Helsinki provided the backdrop for InvestmentEurope’s first ever Roundtable event, giving local fund selectors an opportunity to take part in a close-knit series of presentations, all rounded off with a panel discussion bringing together the three managers present for their own particular views on challenges and opportunities facing investors in the current environment.
Aziz Unan of RenAsset Management, speaking in his capacity as portfolio manager of the RenAsset Ottoman fund, focused his presentation on the need for an equity manager such as himself running a portfolio looking for ideas in an area such as emerging Europe, to more than ever look for the details behind the stories being told by local companies and their managers.
Factors such as corporate governance are not just to be considered as part of a generic ESG layer, but will make a crucial difference, especially in terms of treatment of minority shareholders – as foreign investors so often are when investing in emerging markets.
Good management teams and proven track record in terms of visibility of revenues, cash flows and dividends are important, as well as identifying what competitive advantages companies have before investing in them.
Where Unan may differ from a number of peers is in his unconstrained approach. He said that in markets such as Turkey, indices should be seen as tools rather than a route to portfolio construction per se. For example, he noted that RenAsset will look to cover three times as many companies as there are in the MSCI Emerging Europe 10/40 index, to maximise the potential to discover under-researched companies.
By taking such an approach it becomes not only possible to outperform benchmarks through active management, but also to offer investors better returns at lower risk, in particular when considering single country indices such as MSCI Turkey.
Adam Purzitsky is senior quantitative portfolio manager and co-manager of the Ignis Absolute Return Government Bond fund. He joined Ignis Asset Management in January 2009, with a background working in quantitative strategies.
Ritu Vohora is a portfolio construction specialist at M&G Investments and has been working with the manager’s Portfolio Construction & Risk team for the past five years. She joined M&G in 2005.
Aziz Unan is portfolio manager on the RenAsset Ottoman Fund, which he has led since launch in 2006. With 17 years of industry experience, he joined RenAsset Management in 2012 when it acquired the team at Griffin Capital.