GLOBAL - Nomura Asset Management plans to launch an emerging market small-cap strategy that will determine holdings according to a country's gross domestic product adjusted for purchasing power parity.
The strategy, the Nomura Emerging Wealth Strategy (NEWS), will launch on 22 February as a UCITS fund, and has already attracted $23m from a UK-based local authority pension fund, said Mark Roxburgh, Nomura's head of marketing and client services. He declined to name the scheme.
"The future consumers of the world are in emerging markets," said Roxburgh. "We can target these future consumers by adjusting for GDP and PPP."
The aim is to invest in countries and companies that will generate more wealth than others. Countries like China, Russia and Mexico are overweight the MSCI Emerging Markets Small-Cap index. Meanwhile, relatively wealthier countries like South Korea, Taiwan and South Africa are drastically underweighted.
According to data from Nomura, the strategy has outperformed the index by an annual nine percentage points since 1 April 2004, 10.5 percentage points in the past five years and 3.8 percentage points in the past three years.
Nomura has been marketing the strategy to European pension funds, and expects to raise about $100m in a year.
Efforts to achieve environmental goals may be consequential
Crisis causes change. We know this both as human beings and as experienced global investors. The 2008 global financial crisis (GFC) led to a reckoning in how businesses were run, especially in financial services. The GFC ultimately redefined fiduciary...
Emerging market (EM) equities have rebounded by more than 40% from the lows reached in March, due in large part to the tremendous monetary and fiscal stimulus in both developed and EM countries. While we all await clarity on a second wave of COVID-19, the timing of vaccine development, and the outcome of the US election, we’d like to discuss five questions that are shaping our thoughts at State Street Global Advisors on EM equities right now.
In this Q&A, Brad Godfrey, CFA, institutional portfolio manager and director of alternative & asset allocation strategies, discusses the recent performance and outlook for emerging-market debt (EMD), paying particular attention to how the pandemic has affected the asset class and where the EMD team sees opportunity across the market.
Henry Odogwu, Head of the asset owner group Europe at FTSE Russell discusses