Key Impact Points:

• New fund tailored to meet UK demand for emerging markets exposure.
• Contrarian, deep-value investment strategy with a long-term horizon.
• Achieved +16.7% annual relative return and +18.2% absolute return since 2020 launch.

Schroders announced the UK launch of the Schroder Emerging Markets Value Fund, addressing the increasing UK client demand for exposure to the long-term growth potential of emerging markets. The strategy, initially launched in September 2020 as part of Schroders’ SISF range, has now been made accessible to UK investors. This fund operates with a contrarian approach, adhering to a deep-value investment philosophy and a long-term investment horizon, focusing on assets that managers believe are significantly undervalued.

The fund employs a bottom-up stock-picking methodology, currently investing in 41 holdings across 10 sectors in 17 countries, including China, Mexico, Nigeria, and Brazil. It aims to deliver superior risk-adjusted returns against its MSCI Emerging Markets benchmark. Since its inception, the fund has delivered a +16.7% per annum relative return and an absolute return of +18.2% annualized.

Vera German, Fund Manager of the Schroder Emerging Markets Value Fund, emphasized the success of value investing in emerging markets over the past 20 years. “Value investing has proven to be an extremely strong returning style in emerging markets. Responding to our UK clients’ demand, we are thrilled to launch an onshore vehicle, giving UK investors access to this successful strategy,” German said. “Our approach is distinct from most peers who adopt a top-down macro strategy. Instead, we are bottom-up investors, identifying value first and building our portfolios one stock at a time.“

Juan Torres, co-Fund Manager, highlighted their extensive experience and the unique bottom-up approach. “With over 30 years of combined investment experience and having grown up in emerging markets, Vera and I bring an authentic perspective to stock picking. Our flexible all-cap approach, unlike many peers with a structural large-cap bias, has allowed us to deliver a concentrated high-conviction portfolio, offering clients unparalleled value opportunities,” Torres stated.

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The Schroders Value Team manages $13bn in assets, utilizing a contrarian, low-turnover, and pure value investment style. The fund’s success is built on strict valuation discipline, investing only in assets deemed significantly undervalued.