Doddington Emerging Markets Fund LLC
A high conviction global emerging market equity strategy which combines fundamental bottom-up research with valuation discipline.
Investment objective
The Fund seeks to achieve over the long term a total return in excess of that of the MSCI Emerging Markets Index (with net dividends reinvested) through investment in a concentrated portfolio of 15-25 equity securities of companies in emerging markets, and from other markets where it can be demonstrated by the Investment Advisor that the company concerned is overwhelmingly an emerging market related company. The approach is focussed on valuations and bottom-up fundamental research of individual companies.
Fund particulars
| Launch date | 01 July 2011 |
| Fund size | US$379.2m |
| Domicile | USA |
| Structure | LLC |
| Base currency | USD |
| Dealing | Monthly |
| Min. investment | US$3,000,000 |
| Management fees | 0.90% per annum |
| TER | 1.03% per annum |
| Benchmark | MSCI Emerging Markets |
Portfolio manager
Tom Taylor
Tom Taylor
Tom joined OP in June 2008 from Alta Advisers Ltd. In 1999 he joined Alta Advisers, then headed by Richard Oldfield, and was responsible for managing emerging market equities portfolios. Before this he was an investment analyst at Adam & Co., based in Edinburgh. He graduated from St. Andrews University and Stirling University. He manages the emerging market portfolios and contributes to the overall investment selection.
Latest publications
Latest publications
Emerging Market Equities Strategy
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Commentary
Equity markets are buoyed by stimulus and a return of global economic activity as governments are reluctant to re-impose lockdowns. The holdings have ‘toughed it out’. We see the differential in valuation between ‘value’ and ‘growth’ stocks in emerging markets as having become too stretched – and can favour value.
The bottom performers by contribution for the month were Samsung Electronics and Petrobras. Samsung Electronics (Korean electronics manufacturer) is benefiting from demand based on the ‘stay at home’ economy shifting life online and upgrading equipment to do so. In addition, supply discipline in the semiconductor industry adds to the credibility that the industry will experience gentler cycles (versus history) going forward. At the moment we are in a dip in the semiconductor cycle. Petrobras (Brazilian oil producer) continues to focus on its low-cost pre-salt operations. The company has spent the last several years in deleveraging mode, debt management, cost control, and capital expenditure restraint. Petrobras is a national champion and we believe it can comfortably weather a prolonged period of lower oil prices.
The top performers by contribution for the month were Buenaventura, Indofood, and Ternium. Buenaventura (Peruvian miner) experienced an extreme national lockdown in Peru to fight Covid-19 that has been lifted allowing all its operations to re-open. Most of its output is in precious metals that are experiencing buoyant prices. Indofood (Indonesian snack food producer) made an acquisition to expand geographically (into Africa and Saudi Arabia) with its noodle business. Investors hope that it can replicate the success of its domestic noodle business over time and allow the company to grow into new markets. Most of Indofood’s categories favour eating at home and these are performing well. Ternium (Latin American steel producer) is facing a difficult economic environment in Mexico and its other South American markets, as the region is still in the midst of the virus impact. Management have focused on costs and liquidity by deferring capital expenditure and the dividend payment. We believe Mexico is an attractive manufacturing location and as an efficient low-cost operator Ternium should benefit from these long-term growth prospects.
The top performers by contribution for the quarter were Buenaventura, Infosys, and SK Telecom; and the bottom performers were Turkcell, Thai Beverage, and Embraer.
Capacity and flows
AUM of the strategy is now below our US$1bn capacity so we are accepting capital from investors, with priority given to existing investors and those on the waitlist, and then from new relationships. If you are interested in the strategy, please contact us.
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