navigating emerging markets with high conviction.

Traditional emerging markets are evolving rapidly, offering attractive investment opportunities.

Many companies operating in these markets are benefiting from this trend as well as the associated shift in demand patterns. 

Lombard Odier Investment Managers takes a highly selective approach to investing in emerging market companies, recognising the diverse nature of the markets and companies within them. Investing for the long-term, we put sustainability at the heart of our process.1

 

Sub-fund details:

LO Funds-Emerging High Conviction

In a world of scarcer capital growth, major shifts in emerging markets create a potentially valuable opportunity.

 

Emerging economies: coming of age.

 

1.-Sleeping-giants-(180×180px).png 4.-Getting-stronger.png

Sleeping giants
Emerging markets are home to 85% of the world’s population.2

 

Getting stronger
Many emerging market economies are stronger and wealthier than ever before.3

3.-Growth-spurt.png 2.-Rising-Influence-(180×180).png
Growth spurt
Between 2015 and 2030 emerging market economies could grow twice as fast as developed markets.4

Rising influence
Emerging markets account for half of global GDP5 but only 12% of market capitalisation… for now.6

 

why invest?

In a world of scarcer capital growth, major shifts in emerging markets create a potentially valuable opportunity.

Emerging market economies have evolved and strengthened over recent years, but they remain diverse.7

 

Rising strength, wealth and growth 

Emerging markets – which include China, India and many other fast-growing nations – look very different now compared with 10 years ago. 

More robust and wealthier economies, lower inflation, stronger currencies and rising domestic demand for goods and services are just some of the positive trends shaping emerging markets. 

Many companies operating in these markets are benefiting from these trends.

 

Change and diversity

With household wealth rising, demand trends are shifting from basic goods to services. And with big shifts in demand come big potential winners (and losers).

While investors group emerging mar­kets together, they are actually very di­verse. Economic strength and dynam­ics vary significantly across countries; even in the strongest markets, the prospects of individual companies vary dramatically.

This is why we believe a highly-selective investment approach centered on sustainability is vital.

 

investment team.

 

LOcom-AuthorsAM-Rabattu.png Didier Rabattu 
Portfolio Manager, Geneva
LOcom_AuthorsAM-Lange-Broussy.png Odile Lange-Broussy 
Portfolio Manager, Singapore

 

Investment strategy and philosophy

At Lombard Odier Investment Managers, we believe sustainability will drive future return potential8

We adopt a three-pillar approach to finding sustainable businesses, looking for those with sustainable financial models, sustainable business practices and sustainable business models. 

1

Sustainable financial models 
We look to identify excess economic returns, focusing on companies with capital efficiency, cash generation and limited dependency on external capital.

2 Sustainable business practices 
The team also considers extra-financial information (Environmental, Social and Governance criteria) aimed at avoiding the worst corporate practices and controversies which can be damaging both to society and to investment returns. 
3 Sustainable business model 
We tap into one of the biggest structural mega-trends of our times: ageing demographics. We believe that finding business models that we consider truly innovative is key to identifying companies with staying power through eco¬nomic cycles. 

The end result 

The result is a high conviction portfolio of 50-70 stocks that seeks to invest in sustainable companies that have the potential to offer above-market growth and returns at attractive valuations – businesses that help today’s retirees lead longer, healthier, financially secure and fulfilling lives.

 

We believe a highly selective investment approach centered on sustainability is vital for investors in emerging markets.

 

Sub-fund details:

LO Funds-Emerging High Conviction

 

sources.

1 There can be no assurance that the Sub-Fund’s investment objective will be achieved or that there will be a return on capital or that a substantial loss will not be incurred.

2 Source: OECD based on MSCI Emerging market index countries, i.e.: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Russia, Qatar, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates.

3 Source: OECD.

4 Source: LOIM.

5 PPP-based measure. 

6 Source: McKinsey & Company 2015 “The new global competition for corporate profits.” 

7 Source: LOIM.

There can be no assurance that the Sub-Fund’s investment objective will be achieved or that there will be a return on capital or that a substantial loss will not be incurred. For illustrative purposes only. Holdings/allocations are subject to change. Past performance and forecasts are not a reliable indicator of future returns of the Sub-Fund.