Our Emerging Markets (EM) strategies seek to deliver excess returns by identifying attractive EM equity opportunities through rigorous stock selection.
Our investment philosophy is built upon three key ideas:
Rigorous fundamental research
We conduct bottom-up, fundamental research that is rigorous and often contrarian, and we apply dynamic, industry-specific valuation metrics. We stick to the disciplined approach of buying strong business franchises with excellent management teams. We also leverage frequent access to company management teams to gain deep insight.
Global platform, local insight
Our global positioning combined with our local presence gives us increased access to company management teams and information flow, improving our stock selection process and our ability to potentially generate strong consistent returns. We leverage intellectual capital across our global platform of investors in offices around the world. Our on-the-ground presence allows us to meet regularly with companies, enabling us to gain timely information access and to cover less widely-researched pockets of the EM equity space.
Highly differentiated, active all-cap portfolio
Our portfolio invests across the market capitalization spectrum with meaningful exposure to mid- and small-capitalization companies and off-benchmark stocks, resulting in a differentiated portfolio with high active share. These segments of the market are typically less well-researched and therefore more inefficient, giving them strong alpha generation potential.
Multifaceted risk management
We employ a comprehensive approach to risk management and work with the Fundamental Equity Team’s Chief Risk Officer to scrutinize portfolio risks, avoid unintended factor bets and work towards our goal of generating excess returns through stock selection. We also seek to benefit from the robust resources of independent GSAM and firmwide risk management teams. We monitor liquidity to ensure we receive best execution.
Our Emerging Markets strategy seeks long-term capital appreciation by investing primarily in the equity securities of companies in emerging markets using a variety of technology-driven techniques.
We seek to harness the power of Big Data to uncover new and previously undiscovered investment opportunities before the broader market prices them in. Our investment process is built upon rigorous bottom-up research, repeatable security selection and risk awareness, and has evolved over time to include more nuanced and unconventional data. Our culture of research, combined with specialized industry knowledge and technological advancement, continues to drive evolution in our process as we search for robust, diversified sources of return. Our approach is founded upon the following principles:
Robust, on-going research effort
Our research team consists of many well-trained and highly experienced professionals who are constantly focused on enhancing every aspect of the investment process. We combine experienced economic insight with non-traditional data sources to provide perspectives on companies that other investors may not be seeing.
Proprietary daily risk models
We have developed proprietary, process-specific daily risk models that offer numerous potential advantages over third-party models. Our portfolio construction process utilizes these models to manage risk and allocate risk only where we believe there is potential for positive returns.
Disciplined, comprehensive investment approach
We have an extremely systematic and disciplined approach to investing. Our process allows us to assess all of the stocks within our investment universe on a daily bases. By employing a rules-based approach, we aim to produce repeatable results from intended sources of return.
Independent risk management group
We seek to be on the cutting edge of risk management. We leverage an independent Market Risk Analysis (MRA) department that monitors the risk of all the division’s products and portfolios independent of the portfolio management process. The department has developed a division-wide architecture that aims to track the absolute and relative risk level taken by each of the portfolios under management.
For more information, please contact your GSAM relationship manager